Publisher: a new role in data herding
To weather industry disruption, publishers essentially need to become leaders of big data and data intelligence companies.
In a recent interview at PBS’ Media Shift, Jason Ashlock, founder and president of Movable Type Management, addressed the changing roles of publishers and argued that they’re not innovating fast enough. Ashlock argues that we’re in the age of the author and direct audience engagement and that publishers need to become conduits for this engagement and curators of communities in addition to curators of quality books.
In a similar vein, Forbes writer Suw Charman-Anderson recently argued that publishers need to become retailers. As retailers, publishers put themselves in a position to collect customer data, which in turn puts them in a better position to offer customers unique additional value and experiences. O’Reilly’s Joe Wikert is a big proponent of the direct sales channel.
To weather the disruption in the industry, publishers do need to become strong multi-media companies as Ashlock suggests and retailers as Charman-Anderson suggests, but more than that ― more to the root of that ― publishers essentially need to become leaders of big data and data intelligence companies in order to capitalize on the benefits of these business models. They need to learn how to sift through and analyze data to extract meaning, quite a different business than traditional publishers are used to and not an easy task. As Adam Frank argues at NPR, making use of big data and data intelligence requires specialists who understand the intricacies and nuances of data, who know how to “separate the chaff from the real, useful insights.”
Penguin Random House: Parsing the messages
Using a word cloud to get a better sense of what the executives are emphasizing
Word clouds offer a different way of viewing a document. Sometimes they shed more light on what the author is really emphasizing. You’ve probably already read the merger messages sent by Random House’s Markus Dohle and Penguin’s John Makinson. I’m sure each of those letters were edited by quite a few people before they were sent. They’ve been scoured and polished till just the right message was communicated.
So what do they look like in word cloud view? I spliced the two documents together and the result is shown below.
It’s not surprising that much of the emphasis is on the “company” and its name. Look a bit closer and you’ll also see that “authors” also appears frequently. What about “digital” though? It’s there…you just have to look closely. Very closely.
BookJS turns your browser into a print typesetting engine
The design of books and paper products enters a networked environment
I mentioned in an earlier post that the movable type of Gutenberg’s time has become realtime, in a very real sense each book is typeset as we read it. Content is dynamically re-flowed for each device depending on display dimensions and individualized settings. Since ebooks are webpages, browsers have come to play a central role in digital ereaders.
What is interesting here is that the browser can also reflow content into fixed page formats like PDF which means that the browser is on its way to becoming the typesetting engine for print.?BookJS demonstrates nicely?the role of the browser as print?typesetting engine.
Penguin Random House: How big is big enough?
It should be less about Amazon and more about going direct
Call me skeptical but I feel the merger between Penguin and Random House is less about creating “greater scale” and more about simple consolidation in a shrinking industry. Which organization is more likely to create the truly innovative, disruptive products of tomorrow’s publishing industry: a behemoth like Penguin Random House or some start-up working out of the proverbial garage? My money’s on the latter.
And if it’s really all about creating scale to deal better with Amazon, well, how big is big enough? Aren’t either one of those operations already large enough to manage Amazon? If not, are the two combined really going to make a difference there?
I’m not convinced the way forward for the big six is to get even bigger so they can push back on Amazon. The real solution is to create another distribution channel so they’re not ?as dependent upon Amazon tomorrow as they are today. It’s called a direct channel and none of the big six are making much progress building one out. Yes, it requires a strong consumer brand. Yes, it means they need to build a site that offers compelling reasons for consumers to buy from it rather than Amazon, which is no small task. And yes, it also means they need to abandon DRM.
Instead of just merging I’d rather see one of the big six stand up like this small publisher and say “we’ve walked on eggshells for far too long…it’s time for us to get serious about building that direct channel and not worry about how our existing channel partners will react.”
Publishing News: Amazon gets a brick-and-mortar bookstore, sort of
Waterstones and Amazon team up, Google's battle with newspapers continues, and the Big Six to become the Big Five?
Here are a few stories from the publishing space that caught my attention this week.
U.K. bookstore teams up with Amazon
Charlotte Williams and Lisa Campbell report this week at The Bookseller that Waterstones bookstore in the U.K. launched its Amazon Kindle promotion, wherein customers can purchase a Kindle, Kindle Fire, Kindle Fire HD, or (by the end of the month) a Kindle Paperwhite in their brick-and-mortar stores. Williams and Campbell report that the point-of-sale slogan reads in part: “There are two sides to every story. With books and now Kindle you can enjoy both at Waterstones.”
In an interview with Leo Kelion at the BBC, Waterstones’ managing director James Daunt defends the move against critics who declare he’s signed the bookstore’s death warrant, saying he’s not a “moron” and indicating (without specifics) that the store is making money off the deal. Daunt also argues that you have to look at the bigger picture:
“All that we have to do is encourage people to come into our shops and to choose the books. I don’t frankly care how they then consume then, or read them, or indeed buy them. But if you spend time in my shops, and you really enjoy it, and you come back more often and spend longer, you’re going to spend money in my shops.”
Though Kelion calls the move “a twist no one saw coming,” someone did see this coming — a bookseller, in fact. In a Q&A following The Kepler’s 2020: Building the Community Bookstore of the 21st Century session at TOC 2012, Kepler’s 2020 project leader Praveen Madan said:
“[Ebooks are] something we want to provide; we want to be part of the overall experience. But the solution and the technology has to come from somebody else. I’m very serious about looking at [partnering with] Amazon and just giving away Kindles and telling people it’s okay — you have our permission. Walk into the bookstore, browse the books and download the books on your Kindle.”
Direct channels and new tools bring freedom and flexibility
It's time to build a direct channel and bring your content development platform up to date
Earlier this week I wrote about why I’m bullish on publishing’s future. I talked about two areas that are ripe for change: ebook prices and formats. In the second and final part of this discussion I share the other two reasons why the future is bright for smart publishers: direct channels and new toolsets.
Direct Channels
As we’re creating those rich, HTML5-based products, we should also start thinking about the opportunity to sell direct to our customers. I’ve heard some publishers say that they see no need to create a direct sales channel because (a) the existing retailers?do a great job and (b) they don’t want to compete with their retail partners. Perhaps these publishers haven’t noticed that some of their retail partners have no problem competing with them as publishers. Even if they aren’t concerned about that, they should be focused on establishing a direct relationship with their customers.
Direct channels provide outlets for products, and they also provide customer insights that are almost impossible to get anywhere else. For example, you can keep a close eye on what formats customers prefer (EPUB, mobi or PDF) and make adjustments as necessary. Good luck getting your retail partners to provide you with that kind of information.
Creating a successful direct sales channel isn’t easy. There’s much more to it than simply offering your catalog on your website.
You need to give your customers a reason to buy from you rather than buying somewhere else. Publishers who take the time to do this will be richly rewarded, though, not just in sales revenue, but customer intelligence. Publishers need to re-evaluate what value they can bring to the process. Building communities and creating experiences around your books will play a huge part in this development. This is especially relevant for smaller publishers who don’t have the muscle to compete with Amazon and other industry giants in attracting large numbers of consumers. By offering a more narrow but deep and focused range of books and expertise to a smaller number of specialized consumers, publishers might just be able to carve out an area that they can fill and manage.
Evolving Tools
Publishers have spent small fortunes enabling their production systems to output all those formats covered in the first part of this discussion. Despite those?investments, most publishers still work with the same content creation tools they used in the pre-ebook era. It’s time to bring our authoring tools in line with the capabilities of today’s powerful e-reading devices and apps.
More and more books are being written by multiple authors these days. Even if it’s a single-author project, there are still editors and reviewers who need to get into the manuscript, often working on it simultaneously with the author or each other. Tools like Microsoft Word don’t really lend themselves to collaboration like this.
Another issue we’re going to face in the future is more frequent updates to content as well as short-form content that can grow over time.
This leads to the need for version control capabilities that haven’t been a major consideration in the past. And even if a publisher’s content isn’t updated frequently, there are still version control considerations for the collaboration requirement noted earlier.?For example, if a freelance editor accidentally wipes out a batch of changes the publisher will want the ability to roll back to an earlier version of the content.
Booktype, Sourcefabric’s tool for writing and publishing books?and ebooks, already responds to those needs and anticipates the demand for collaborative tools very well. At O’Reilly, we also realize the need for these collaboration and version control capabilities, and have made the investment to bring our authoring tools in line with today’s content management requirements. We’re currently using a new authoring and development platform we developed?for our books, and we plan to make it available to other publishers soon, so stay tuned for more details right here on the TOC community site.
Three questions for…Kevin Franco of Enthrill
Brick-and-mortar stores can also be a purchase point for ebooks
1. Enthrill has a distribution program that puts ebooks into brick-and-mortar outlets. Doesn’t this seem counter-intuitive?
We’re in the business of selling books, brick & mortar stores are still the number one seller of books, so being there is completely intuitive.
No doubt, the easiest way to purchase an ebook is by using the ‘shop’ button on your ereading device. We’re not intending to change that at all. But the online model is flawed in some respects as it diminishes discoverability. Although being addressed through many metadata solutions, online discovery will never be as good as the tactile, visual discovery that physical retail stores can provide through merchandising and product placement in high traffic retail outlets.
One of the major flaws in the current online model are the silos that each device operates in, which limits transactions and interactions outside of the users relationship with that single retailer. Purchasing content outside of a silo is a challenge and as such one of the largest single areas of traditional book sales has been eliminated from the current equation: gifting. Until now, giving an ebook as a gift has been messy or non-existent between silos. Our device agnostic approach makes it easy for anyone to give an ebook to anyone.
Enthrill’s ebook gift cards target the gifting market and are merchandised in some of the highest retail traffic locations available in grocery and mass channel stores. As an extension of these stores’ gift card program, they offer something other gift cards don’t: the ability for consumers to make a personalized selection of a specific title to give vs. a generic dollar value card. This is what excites retailers most of all, that and the fact that Enthrill is classified as DLC (downloadable content), which is currently the fastest growing segment within the gift card industry.
Of course, being in high traffic locations will result in some additional discovery of titles, creating new touch points for publishers and in addition to gifting transactions will generate incremental impulse sales. That’s what brick and mortar has done so well for publishers for so many years. To sum up, we have built a new sales channel for publishers to get their content to market.
2. What can publishers and authors do to get the most out of Enthrill’s physical store ebook distribution?
Get involved.?Publishers and authors that work with us in getting their best content into our system will maximize their ability to realize additional retail exposure and sales.
Enthrill has two main verticals in distributing content to the end user; the first is through the mass retail channel (ebooks to go) and the other is through our wholesale model (ebooks on demand) which services bulk, prepaid transactions where content producers handle the distribution (book fairs, special sales etc.)
In either vertical, we highly recommend that authors/publishers let their fan base know that their books are now available as ebook gift cards.
3. Do you have any data you can share with us about how successful your ebook distribution program has been to date?
We entered the market in June and began selling ebooks in 4 major retail chains as well as a handful of independent bookstores in Canada.
We have gathered a lot of data to date, some of which is very surprising such as our redemptions. Our Endpaper Engine serves content to every device, so we get to see what device types our users are reading on. The highest number of redemptions are being done through iOS devices (38.8%) which was a surprise. In fact, the redemptions do not match the market penetration of devices at all, we have some theories on why this is but are reserving our comments until we gather more in depth market research through focus groups and online surveys.
Our expectations was to see redemptions come slowly in as cards were gifted and redeemed well beyond purchase, but we were surprised to see a large number of cards being redeemed the same day as the purchase (15.1%), which tells us the impulse market is greater than what we imagined. We believe that our ebook gift card redemption will be very similar to that of the gift card industry with about 15% of cards never redeemed after 5 years.
The data we are collecting is very unique to the industry and is important in shaping our offering as we expand throughout North America over the next few months. We will be sharing more of this data at the Books in Browsers conference later this week.
Kevin Franco is co-founder and president of Enthrill.
The complex world of copyright, licensing, and piracy
Bill Rosenblatt untangles several thorny areas of IP distribution and ownership
Podcast: Play in new window | Download
Our TOC theme this month is “legal” and I thought it would be interesting to have a conversation with Bill Rosenblatt covering a variety of topics in the legal realm. Bill is a recognized authority on intellectual property in the online world. He’s also an author of the Copyright and Technology blog as well as the?founder of GiantSteps Media Technology Strategies.
Key points from the interview include:
- Copyright vs. Creative Commons — As Bill says, “copyright law is a huge mess”, and Creative Commons (CC) is a viable alternative. CC has never fully embraced the commercial content community though. CC also doesn’t really make enforcement of IP ownership any easier.
- Libraries and sales vs. licensing — I feel our industry is overcomplicating the library channel situation but Bill explains how digital content isn’t subject to copyright but rather to whatever licensing terms are being offered. Bill feels libraries are “screwed” unless there’s a change in the law. It doesn’t help that libraries aren’t accustomed to trying to operate like businesses.
- First-sale doctrine — ReDigi is a great example of a company that’s pushing the envelope on sale vs. licensing of content. Bill feels it’s unlikely ReDigi will prevail in the current litigation to resell digital music. (See related TOC article here.)
- Piracy — Bill points out that obscurity is indeed a bigger problem than piracy…until you become famous. He asserts that Lady Gaga doesn’t benefit from piracy but I’m not sure I agree. After all, maybe future paying Gaga fans start off pirating a song or two before they get hooked.
This post is part of the?TOC podcast series. You can also subscribe to the free?TOC podcast through iTunes.
A novel approach to going DRM-free
What happens when DRM-free only applies to direct sales?
I had a very enlightening conversation today with a small publisher who shall remain nameless for the time being. More on their secrecy in a moment… They’re thinking of going DRM-free but with a couple of twists.
First of all, they’re thinking of only going DRM-free with their direct sales on their website. They’ll instruct Amazon and all the other retailers to keep using their DRM model. This publisher figures they can use this ?as a way to make the direct sale more appealing to customers. They’ll also give direct customers all formats. So the selling proposition is, “Buy from Amazon and be stuck with their DRM limitations; buy direct from us to get all formats for all devices and avoid vendor lock-in.”
Secondly, they plan to include a watermark in those direct sale ebooks that says something like “bought from xyz”, where “xyz” is the name of the publisher. I’m no fan of watermarking but I like the logic they’re using on this. By saying the word “bought” they hope to trigger a reaction from pirates the content and serve as a gentle reminder that this content really isn’t being distributed for free. More importantly, since this watermark will only appear in the direct sales copies they’ll be able to determine whether their DRM-free content is what ultimately winds up in the wild.
Since I’m not naming names you can tell they want to keep a low profile on this for now. My contact at this publishing house told me they’ll reassess this in the coming weeks and they might be willing to share some of their results with us here at TOC.
Stay tuned for more…
The future is bright for ebook prices and formats
But first we have to break a bad habit and embrace HTML5
I typically get a sympathetic look when I tell people I work in the book publishing industry. They see what’s happened with newspapers, they realize many of their local bookstores have disappeared, and most of them have heard about the self-publishing revolution. The standard question I’m asked is, “wow, isn’t this a terrible time to be a book publisher?” My answer: “We’re in the midst of a reinvention of the industry, and I can’t think of a better time to be a book publisher!”
Sure, there’s plenty of volatility in our business but we have an opportunity to not only witness change, but embrace it, as well.
With that in mind, there are the first two of four key areas that make me so enthusiastic about the future of this business: pricing and formats.
Pricing
You might be wondering why pricing tops my list, particularly since we seem to be in the midst of a race to zero pricing. First, Amazon set the customer’s expectations at $9.99, and now some of the most popular ebooks are free or close to free. Amazon routinely sells ebooks at a loss so that they can offer customers the lowest price,?and the agency model isn’t turning out to be the silver bullet for falling prices many hoped it would be.
Despite this, I firmly believe publishers are to blame for low ebook prices, not Amazon (or anyone else). After all, we publishers are satisfied with quick-and-dirty print-to-ebook conversions, where the digital edition doesn’t even have all the benefits of the print one. Ever try loaning an ebook to someone? How about reselling it? Of course customers are going to assume the price should be lower in digital format!
We need to break the bad habit of doing nothing more than quick-and-dirty p-to-e conversions and look at new strategies to reverse the declining pricing trend. I’m talking about rich content.
Let’s work on integrating features in the digital product which simply can’t be replicated in the print version. Once we start creating products that truly leverage the capabilities of the devices on which they’re read, I believe we’ll end the race to zero pricing.
Formats
If you’re a publisher, you’re forced to deal with mobi files for Amazon, EPUB for almost all other e-book retailers, and probably?PDF as well. Despite all the sophisticated tools and techniques we can access, it still requires extra work to deliver content in all these formats, especially as specs change and capabilities are enhanced.
Fortunately for us, help is on the way, and its name is HTML5. I believe that in the not too distant future, we’ll be talking less about mobi and EPUB as we focus more of our attention on HTML5. After all, HTML5 is one of the core file formats on which EPUB 3 and KF8 (Amazon’s next-gen format) are built. Additionally, HTML5 already supports many rich content capabilities we need to address the pricing opportunity noted earlier. HTML5 is supported by all the popular web browsers, so there’s no need to wait for mobi or EPUB readers and apps to offer richer content support; let’s just use the underlying technology capabilities of HTML5 and turn every browser into a reading app.
In the second part of this discussion I’ll share the other two reasons why I’m so excited about publishing’s future: direct channels and evolving tools.
