digital change

I Think Publishers Have Lost The Battle & The War

The thing about the end of Agency is that it’s not over. That is to say that the rearguard action by the legacy publishing establishment isn’t finished. And make no mistake, Agency Pricing and the rules and agreements that supported it were an attempt to stop the clock and buy the established players a breather against the tide of innovation. That the establishment chose to work with one of the greatest innovators in another sphere doesn’t make the move any less defensive, Apple certainly didn’t break too much new ground in the digital book world (though the game is a long one and they may yet).

For the record, the legacy establishment is almost duty bound to protect its position and I  don’t resent the position it held. In many ways I have been a beneficiary of the legacy publishing system. Legacy publishers are in the position they are in because they were successful in an age that valued their corporate skills and in which scale was important and profitable.  Agency was about protecting that model, that profit.  It was couched in language that suggested it was about protecting the value of writing and the incomes of authors (and to be fair, many of those offering those lines do honestly believe them), but really it was about protecting company revenues and shareholders profits. I’m fine with those goals, I’m not fine with pretending or convincing myself I’m being noble when I’m not and I’m also not fine with the reader paying the price for that protection.

Readers were by far the biggest losers in the Agency world. Thus the actions of the big six ran directly counter to their most important stakeholders. The big six hadn’t yet realised that readers had become their biggest stakeholders. They still answered to other management.

The problem is that the publishing system as it stands is being ripped to shreds by digital change.  We do need a publishing industry, we don’t necessarily need THIS publishing industry, the legacy one. There is no reason why any individual publisher MUST survive or that quality publishing won’t happen if the legacy publishers do fail.

The Agency battle was and is not really one over the creation or publishing of quality works nor even one over the price we might charge for those quality works or who sets that price, it is over the allocation of profit/revenue within the system that allows for the creation and publishing of quality works.

Authors will get paid if the big six fail, books will get published if the big six fall, books will get written, published and read if everyone currently in the industry somehow stopped being in the industry tomorrow. Sometimes publishers forget that.

The shame of it all is that if the big six publishers accepted the inevitability of change and directed their efforts towards the new opportunities and the radical restructuring that’s required rather than trying to fight, what I believe is a hopeless and misplaced rearguard action, they would have achieved more AND kept the audience with them.

That’s the key, because resisting puts them on the wrong side of the fight. Resisting the shift towards digital distribution and the attendant earthquake in industry structure makes publishers the bad guys. After Agency, suddenly publishers are not the nurturers of talent but the maintainers of high prices, not the finders of new voices but the conniving capitalists, the slick backroom dealers, not the men and women who live for the written word. Their companies are known worldwide for being sued by the US Government and for alleged collusion rather than for being companies with iconic brands and valuable legacies.

There IS a danger that an non-agency world might (though I think the possibility unlikely) have resulted in an Amazon monopoly, but even if it had and even if the changes being imposed DO lead to some form of monopoly, then at least publishers would have been on the RIGHT side of that monopoly, calling for action, on the side of the readers, the writers and the general wave of opinion rather than falling, as the record labels did before them, into the arms of fear and foolish resistance to change that they cannot control.

So the legacy system made a calculation that Agency could be gotten away with, and they were wrong. It might have boosted their revenues, given them a huge sense of control and power (attractive in a publishing world that has been so buffeted by change recently)  but now, as the tide of blood rushes back out of the head and calmer times (populated by longer more reflective periods of courtroom drama and negative headlines) lie ahead perhaps the big six and those who favoured Agency might reflect not on the loss of Agency and it’s ‘possible’ negative consequences for their business models but on the loss of the moral ground, the real loss of the audience’s goodwill and the battle, not to maintain not just profitability, but, more importantly, legitimacy and to rebuild their image among readers the world over.

It has been a long week!
Weekend Abú!

Eoin

Author, Niche & Power Shifts: What Pottermore MIGHT Point To

Mike Shatzkin has a fine post about the implications of the Pottermore move in terms of publishers and DRM:

Without DRM, as Berlucchi explained, anybody can sell ebooks that can be read on a Kindle. Once Pottermore decided they could live without DRM, they faced Amazon with a very difficult choice. The ebooks were going to go on Kindle devices whether Amazon wanted them there or not. Either they could ignore them or they could play along. I am sure the “play along” deal includes compensation to Amazon for the sales they refer (as it does B&N and, according to a quote from Redmayne, other distribution relations and affiliations will be enabled going forward.)

In other words, in a refreshing change from recent history, the content owner was able to present Amazon with a “take it or leave it” proposition. They decided to “take it”. They were wise. The game was changing either way.

I’ve long felt that the power balance between authors and publishers has shifted and will shift further as digital change drives home a point I made most clearly in my essay No New Normal: The Value Web (and reiterated here on Futurebook):

All of this will happen despite, or perhaps because of the fact that, the actual slice of value captured by each player changes in size and shape. Publishers will be forced to cede more revenue to authors, the idea that 25% Net is a defensible long-term ebook royalty rate is a farce best forgotten about quickly.

And even earlier (2006) when I wrote about Authors Driving Change:

E-books will push this change even more. There is no reason why authors’ royalties should be the same on e-books as they are for paper books and in many ways there is no reason why the authors cannot sell e-books themselves rather than through a publisher. Why should you sell a paper publisher your digital rights when there is no need?

I think Mike is right to say that Pottermore marks a decisive point of change. It is the point at which owning the brand becomes essential, the point at which the 25% slice for the author stops being enough and the changed power balance between author and publisher begins to bite really hard.

If publishers hope to use author brand and scale to attract readers direct then they need to persuade the authors to work with them. That’s gonna take money and a whole new approach to working with the author. I expect we’ll see more of that.

The other change I believe it will drive even further is that of Niche or community driven content publishing. If selling without DRM enables big  publishers to flourish as retailers (or for that matter niche publishers with scale in a single niche), then there is even more incentive for them to pull readers together in communities of interest (or rather to build stores that appeal to those existing communities of interest) and sell content to them directly rather than spending all their marketing on pulling them to a mass appeal site that only offers them content that works for that reader by chance event or a well placed cookie!

So I see Niche coming back with a vengeance, and community at its side, perhaps even a third horseman in the shape of an industry newly engaged in open standards, weak DRM and a willingness to innovate. That’s rather exciting if you ask me.

Go Read This | Why Multichannel Bookselling is the Future | Publishing Perspectives

I’ve been struck by how many booksellers are doing well by selling ebook readers. A casual comment hit me over the weekend when someone mentioned that the falling prices of non-branded ereaders was impacting overall revenues. That goes to show the value of owning the device as well as the channel to sell content on the device. On the other hand, it must be painful for bookshop staff to be selling devices that will ultimately close the majority of bookstores!

E-book-news.de recently reported that Thalia’s e-reader, the Oyo sold unexpectedly well in stores, not online. People wanted to touch and try out the readers. But once those Oyo readers are in use, their sales will be exclusively online, and it’s hard to imagine their e-books won’t cut into store sales you don’t have to go to a Thalia store to pick up your online purchase, which cuts out an important opportunity to buy stationary and a toy!, or that a more e-reader-educated generation might not be comfortable buying the readers online in the first place.

via Why Multichannel Bookselling is the Future | Publishing Perspectives.

Go Read This | Review: My Amazon Kindle Single publishing experiment | ZDNet

It is when you think through the simplicity of the actual PUBLISHING process that you realise just HOW Amazon has disintermediated publishers.

Once accepted, it was just a case of writing the book and submitting. The actual file you submit is basically an HTML document that is converted to Amazon’s proprietary format.

Why do an Amazon Kindle book? What appealed to me most about Amazon as a platform is that the process was simple and your work would wind up on multiple devices. The Kindle secret sauce isn’t the e-reading device—it’s the ability to take your content to the iPad, iPhone, Android device, PC, Mac or anywhere else. I’m not a developer and need to hit the broadest point possible.

via Review: My Amazon Kindle Single publishing experiment | ZDNet.

The Differential Rates Of Digital Change Problem

I’m not sure if this qualifies as a shameless plug or not, but it is certainly a plug for a piece I’ve written over on EoinPurcell.com:

These sales are starting, slowly but surely, to leak sales from small markets to large markets. The levels are unquantifiable right now in anything but the most sketchy way, but they are surely growing with each Kindle,  Kobo reader, iPad, iPod Touch, iPhone and Android device sold into a small market. The proliferation of devices offering ebooks sold through large market retailers  MUST be driving sales from those markets. When those retailers start sharing their data and how likely is that we will know for sure.

via The Differential Rates Of Digital Change Problem | Eoin Purcell.

Go Read This | Portraits of an Industry in Flux: Digital publishing and UX | UX Magazine

Excellent exploration of the challenges of being a book publisher in the modern age:

Several months ago, we piloted a program to deliver digital course materials to students enrolled in a select group of medical test prep programs These students were evaluated at the end of their courses to determine how using digital course materials affected their learning experiences, as well as how they felt about using the materials. Actual usage data was also collected and compared. We learned that for the large majority of the time, these students were using the digital versions of their course materials as quick reference tools. The most used feature was search, favored over other features such as note taking, highlighting, bookmarking, sharing, and others. The context in which students used the products most often was the classroom. Not online, not on the bus, nor in the subway. They were listening to a lecture and were using these eBooks to quickly look up terms and formulas and reinforce the lecture in a context.This pilot program represented a real turning point for us. We were both surprised and excited about the data we collected, and also by the real insight we had gained into what our customers were doing, what their needs were, and what they wanted us to provide to them. While the data is different product to product, we did learn what to measure and how to listen.In the world of software application development, UX designers and researchers physically watch people using an application and determine information about them and their needs through observation. In the eBook world, the ability to track usage data, feature adoption, and time spent with each product has meant that we have a whole new world open to us, and a new way of conceiving of and talking about our products and product development.Digital products have brought the customer back into the equation.

via Portraits of an Industry in Flux: Digital publishing and UX | UX Magazine.

My 2010 Publishing Heroes

Last year I chose some folks who I though had made 2009 interesting in publishing terms and I believed would do the same in 2010. I think I was broadly right about them. You can see the 2009 list here. For 2010 I’m doing the same.

Richard Nash ~ The Risk Taker
Nash is moving ahead with Cursor a new type of publishing company based on communities, authors, shorter contracts and generally many of the ideas that have been floating around books for a few years now. He’s fiery, inspiring and willing to take a gamble (and be wrong too). He has spoken several times over the last few years about where publishing is going and he never fails to offer rich and convincing arguments to back up his point of view. I’m hoping he’ll be successful, not least because his first imprint community is called Red Lemonade!

Gareth Cuddy ~ The Doer
Sometimes you need people who just get down on the ground and shift dirt. IN many ways that is what Gareth Cuddy has done in Ireland. His DirectEbooks has been selling ebooks for some time now and as he would no doubt concede himself, right now the market is not mainstream, but it is getting there. He’s been pushing for more Irish publishers and small publishers to get into epublishing and through his EpubDirect service he’s offering publishers a decent way to get digital fairly quickly.

Rebecca Smart ~ The Changer
Osprey really shouldn’t be cool (except maybe to military history nerds) but it is. It has created an online community for military history buffs and pioneered direct marketing methods that keep the company engaged with its readers and released a book on Zombies (complete with accompanying video). It recently bought the apparently unconnected Angry Robot Sci-fi imprint from HarperCollins and have shepherded it to great success. Much of this is down to Rebecca Smart’s savvy leadership and ability to drive change. She’ll no doubt say that the great staff behind her at Osprey are as much responsible and I think she’d be right, but even the best Army needs a good general.

Mike Shatzkin ~ The Thinker
Mike is pretty darn smart. What’s more, he’s pretty darn good at putting his thoughts down in a clear, concise and accessible way. If you don’t read his blog, you really, really should. As one of the brains behind Digital Book World (a conference I’ll sadly not be attending this year) he has managed to start the in-depth conversations that US Trade Publishers NEED to have if they are to survive the shifting playing field of digital publishing.  For that alone and the pleasure of reading the posts he shares so freely, he makes the list.

The FutureBook Team
The last choice is always a hard one when one is creating a small list. So I’ve cheated and chosen a team. I’ve done this for a few reasons. Firstly I think FutureBook (a blog and conference run by The Bookseller) came to life quickly, embraced the web rapidly and grew by engaging in a fashion that felt very web native and very focused on community and providing value. Secondly I felt that in doing that they provided a critical hub for debate and discussion about ebooks outside of the US but in the English language. It made ebooks real for many publishers and booksellers outside of the US and that was pretty useful in a year that has been dominated by digital developments. So well done to Samantha Missingham, Philip Jones et al, a fine job, well done.