Go Read This | The Quarto Group Chairman’s Statement

There are so many reasons to read the chairman’s* statement in The Quarto Group’s latest update. For starters it is well written and as a result, is a pleasure to read. It is also full of gems like this one:

Contrary to popular mythology, most people in the developing world are not time-deprived. Indeed, there is much greater scope now to fill one’s non-working time (and, perhaps even one’s working time!) with elective personal activities, ranging from engaging in the chit-chat of social media, exercising, playing sport, indulging in hobbies and pastimes, cooking classes, book clubs, playing videogames, watching television, and so on. The list of activities is endless.

I don’t think you’d read that anywhere else. What’s more it offers something valuable, perspective. Perspective on the industry and what it means to be a certain type of publisher in this digital age.

Orbach sums this up in a succinct pair of paragraphs that dive deep into the implications of digital for Quarto AND for publishing as a whole:

E-books are probably not growing the overall audience much except for a brief honeymoon with a new device and, so long as outlets for printed books remain significant, the costly infrastructure of many existing publishers may have to remain largely in place. The evidence is becoming overwhelming that, in popular, narrative areas of fiction and non-fiction not an area of focus for Quarto, e-books are eating into sales of printed books. This may not challenge the economics of book publishing fundamentally for bestselling titles but, as bookshops diminish, and the exposure of less popular titles declines as a result, the committed book reader will be ill served by the outcome. And, if that were not enough to adjust to, attention is now turning to all the wonderful things that can be done with content on an e-reader such as the iPad, the Kindle Fire, the Nook, and other brands.

While Quarto is feeling the ripple effects of this evolutionary change, the impact to date has been slight. To satisfy the curiosity of analysts and commentators, we have noted  above that our digital revenues climbed five-fold in a year. But they still only represent a little over one percent of group revenues. Quartos book output is substantially non-fiction titles that are useful and, often, necessary for readers pursuing a craft, a hobby, home improvement, self-improvement, and so on. This is not a large part of the current e-book market, and efforts to build both apps and e-books around the kind of content we create have not been well rewarded. This is not surprising, as they have not taken advantage of the benefits that the new tablet computers and e-readers now offer. At the moment, and seeking to take advantage of better and less cumbersome software authoring tools, more efforts are being made to create enhanced e-books. No doubt, some will turn out to be very fine, but it remains unclear whether there is a profitable commercial model lurking in all of the experimentation.

It’s not just the level-headed analysis of whether ebooks are growing the market (anywhere other than the margins or in markets were they may be activating demand that simply could not be met with print books I suspect they are not) but also in the sober attitude towards other digital products. I might personally feel the attitude is a little TOO sober and not possessed of enough vision, but that’s hardly the point. Mostly I enjoy how the two paragraphs illustrate that different parts of our industry are moving at different paces, something we forget at our peril.

Go read the whole thing, it’s rewarding, engaging and interesting throughout.

via THE QUARTO GROUP | LATEST RESULTS.

*That’s Laurence Orbach

The Future Of Publishing In Microcosm | The Increasing Internationalization Of Irish Publishing

Yesterday I was a little unfair to Easons for the pronouncements of the company’s spokesperson and the tone of the article on its ebook strategy which suggested the company was about to embark on a  mission to build a rival platform to B&N and Amazon, something that would surely have been a valiant, if doomed, effort.

When I thought about it for the rest of the day though it got me thinking about just how much ebooks are changing the profile of book publishing and bookselling and how quickly that is happening. For instance I am almost certain of two things about the Irish ebook market:

1) That foreign based platforms and retailers account for the majority of sales (Amazon, Apple, Kobo, Sony etc)

2) That like in the print world UK publishers (and their local imprints) publish the majority of ebooks bought in Ireland both in terms of units and revenue

I’m also close to certain about a third item, but without evidence I cannot prove it, here it goes anyway:

3) That US-based publishers sell more units (and I don’t doubt generate more revenue) from ebooks in Ireland than domestic Irish publishers do and are perhaps second only to the UK publishers (and their Irish imprints)

The first and the last points there are pretty radical statements. The first represents a huge change to the Irish experience of the book industry. Right now in print terms, most books bought by Irish consumers are sold to them by Irish retailers, Easons the principle one but others like Dubray, The Book Centres, Kenny’s, O’Mahony’s, Hughes & Hughes and many many others. That is despite the growth of physical sales through Amazon and the internationally owned (except for Dunnes Stores) supermarket chains. The wholesale and distribution businesses are also heavily Irish owned (with some British presence, increasingly on the Library supply side of things).

The Difference Digital Makes

But the situation is dramatically different on the ebook side of the house. Easons is the only ebook retailer of note in the Irish context (others should shout out if I’ve unfairly missed them out). On the ebook distribution side, EpubDirect are the only (and admittedly impressive) crew actually making a go of that business and even they don’t make up for the fact that the majority of ebooks sold in Ireland will have been distributed through other channels.

You can argue the toss over why this is the case but several factors loom large:

1) Irish publishers have been slow to digitize their content (though they are getting there now)

2) Irish retailers have been slow to embrace the web (except for a few notable exceptions) and slower to embrace eCommerce (again a  few notable exceptions aside) and, finally, even slower again to embrace ebook retailing

3) The costs of developing ebook platforms, ebook retailing sites and ebook distribution systems are high, the Irish market is small, while it might have been possible to forecast the potential to gain customers outside of the island, it is a difficult result to actually achieve (which makes EpubDirect’s success all the more impressive) which mitigates against anyone investing in them

In terms of sales, while UK publishers and their Irish based imprints have come to dominate the book trade, significant numbers of books published by Irish houses continue to sell in print form and account for anything between 15-25% of the trade. With ebooks however, sales from publishers whose books would not traditionally have been made available in Irish territory is increasingly likely. For instance a US published book that does well but might not get a print deal outside of the US has as much (if not more) opportunity to sell in Ireland as any other ebook, the key is whether it is high in bestseller/popular lists or promoted by the retailer for some reason

The only ebook store that really seems to cater specifically for the Irish ebook market is Apple’s iTunes so when Irish publishers do start to make content available they have to fight against ALL the published content there is, not just all the domestically published content and all the UK published content as they do in the print world. Further the people making decisions about ebook merchandising are rarely based in Ireland as once they were (or indeed still are in the print world) and therefore open to some discussion or indeed charm (not inconsiderable amounts of which the Irish are possessed).  You see the problem.

The Outside Context Problem

The Irish publishing industry is fast running into what might be described as some fashion of an ‘Outside Context Problem‘ wherein the new arrivals on the scene are vastly superior in terms of abilities, vastly superior in terms of resources and possessed of superior technology. While some of the participants in the market might grasp the nature of the problem and respond as effectively as they can, the truth is that the disparity in attributes makes success unlikely and the new threat is very much an existential one.

Which sounds very dramatic but think of it this way. The Irish consumer market for trade books is around €150 million a year and 15 million units all in. Suppose only 30% shifts digital over time or €45 million and 4.5 million units. That would leave only €105 million up for grabs for Irish retailers in print form and 10.5 million units. The impact on stores, book publishers and other market participants would be pretty dramatic. There would be closures and job losses and the industry would be considerably weaker. And that’s just the impact on the retail side of the trade. The impact on the publishing side of the trade is unknowable, but there is little doubt that it would be significant and would probably be negative for the domestic publishers (see my earlier paragraph on why). The UK publishers will probably cede sales to US-based publishers, especially if US publishers seek to enforce global ebook rights deals on authors.

We are probably headed in the direction of 30% digital pretty quickly. If we even approach the kind of conversion to digital sales that seems to be happening in the US or even the UK, we can expect that 30% figure to be a reality by 2015. By then the Irish industry will have changed radically and will become almost unstoppably more international not just in terms of the books that sell her, but also in terms of those who sell them. US publishers will probably be the second biggest publishers of ebooks bought by Irish readers (if not the first having overtaken the UK).

There’s interesting evidence of this too from the other side of the fence. The AAP reported that ‘total eBook net sales revenue [for US publisher] for 2011 was $21.5 million, a gain of 332.6% over 2010; this represents 3.4 million eBook units sold in 2011, up 303.3%.’

Frustratingly the APP did not share details for Ireland (those were contained in the full report but not as a single territory, rather as part of a larger group of English language territories) so we don’t know how well those publishers are doing here. Still, we can assume that they did well relative to the size of the market.

What’s more, Ireland and the story of change in the publishing industry really acts as a microcosm for the rest of the English language publishing industry (indeed it acts as a microcosm for any small market which shares a language with a much larger market be it French or German or Spanish or Chinese).

In some ways the whole industry is encountering the ‘Outside Context Problem’ I mentioned earlier as software and technology firms move into a traditionally physical business, but for larger companies, responding can be easier because of their scale and their resources make for a wider context as it were. It’s the small markets where the combination of these larger players and the changes in technology make for such a difficult problem.

Beautiful day here in Dublin!
Eoin

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Interestingly (or maybe just interesting for me) I wrote some time ago about the impact of divergent rates of digital growth on small markets, and in many ways this post is all about that impact. The increasing internationalization of the Irish publishing industry is driven by the very issue I highlighted: Divergent Growth Rates In Digital.

Ebooks Are Boring? So What?

Nick Atkinson has an interesting post over on FutureBook this morning. In it he asks three questions he feels people aren’t asking about ebooks. The ones he hits on are:

EBooks  aren’t actually that exciting, so why are people buying them?

Why am I rubbish at selling books online?

Where the heck is my audience? They used to shop at Borders.

he’s got a refreshing perspective on some of those:

So why are we struggling so much to make a digital book look and feel like a book? I remember the overwhelming sense of disappointment, anti-climax and resignation that I felt when I first looked at an eBook, way back when, on the Iliad – a device thankfully confined to myth and legend (it had a STYLUS for god’s sake). Even now, working with a conversion supplier I’m proud to partner with, who does a good job of stretching the ePub and Kindle formats, whenever we get our eBooks back, we still often gaze misty-eyed at the print edition and wonder where the design went and that’s just on text-based product. If you are honest, you’ve felt the same way. We’ve had moments where we’ve tried to shoehorn full-colour books into reflowable epubs to see what would happen, got the files back and laughed out loud at ourselves for even bothering.

via 3 important questions about digital that nobody is asking. | FutureBook.

Not that he’ll be put out, but I disagree with the first half of his post pretty strongly in that I actually like ebooks as they are, simple text files. I don’t want enhancements.

There’s a peculiar, and seemingly pervasive, fear among publishers that the written word just isn’t compelling enough for their readers (one well addressed by James Bridle here) in the digital age. It’s something I just don’t understand. Afterall text is fine in print, why not in digital form?

The rest of it though, I’m mostly on board with and it speaks to the quick presentation on Niches & Communities I gave to publishers during the Pecha Kucha session at TOC Frankfurt in 2009.

Not, I stress, that I think ebooks are the end of all things book related as I myself wrote for Publishing Perspective some time ago:

THE critical concern should be developing an expertise in how to sell content in many different forms and at many different prices to different audiences. Publishers should be platform agnostic, selling wherever readers are willing to buy and not focusing if it is an e-book, an app, online access, segments, chapters, quotes, mash-ups, readings, conferences, or anything else (a point made Friday on Publishing Perspectives by Clive Rich).

Rather than expend their energy focusing on one format that may be fleeting, publishers need to focus on two long-term objectives: audience development and content curation. Neither of these are specific to digital activities, meaning that they will only serve to bolster the print side of the business as well, whether it declines rapidly or gradually.

Still, a good post that will no doubt generate discussion!
Eoin 

Why The Kindle Fire Worries Me

The Kindle Fire is a beautiful device (and by that I mean it looks pretty nice from a distance). What’s more, it’s at the right price and has a library of content to beat the best on offer. Yet I find it worrying, exceptionally worrying.

Worrying because it marks a shift away from a singular focus on digital books and towards other media forms. Digital books (and their publishers, traditional and self) have benefitted from Amazon’s desire to move their consumers towards digital consumption and purchasing. Benefitted enormously.

Amazon’s strategy though, as the launch of Fire makes clear, is about ALL media forms not just books. As the company builds digital sales of those media (a MUCH bigger market than books), digital books will become less important overall. At some point it may just be the case that they will cease development of a dedicated ereader, just as Apple is close to ceasing the development of a dedicated music player (or at least has relegated the music only devices to the bottom rung of its offering).

More importantly, Amazon is popularising mobile, digital media consumption and at relatively cheap prices. This long-term strategy is all the time building the competition plain text ebooks face.

There is only so much audience attention to go around and as mobile gaming, tv and film watching and web browsing become possible for everyone, it is just possible that digital books will lose out*. Of course maybe the audience that moves digital will be big enough for this to not be an issue, but even so book publishers and authors will need to compete with movies, games and music much more directly and immediately than they have in the past.

The possibility then that the Kindle Fire presents is one where the dedicated device that has done so much to build the digital book market is, however distantly, headed for a quiet retirement and the publishers who think they have it all so sorted now are going to faced a changed game yet again.

But maybe these are just wasted fears! I certainly hope so.
Eoin

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* I’m a pessimist on this score and think that possible is a definite.

Exclusive: Indie Author Michael Wallace Signs 5 Book Deal With Amazon | David Gaughran

Fascinating post over on David Gaughran’s blog from Michael Wallace on why he signed a deal with Amazon’s Thomas & Mercer imprint:

My sales accelerated from a handful, to a bunch, to hundreds and then thousands. I sold over 20,000 books in April and nearly that many again in May. The Righteous climbed as high as the Top 20 on the overall Kindle Store.

A funny thing happened. Agents and editors started querying me. Most of the interest was in The Righteous, a series of thrillers set in a polygamist enclave. It was the same series that had been shopped already and had nearly been picked up for good money before everything fell apart.

What had seemed risky a couple of years ago, now seemed like a sure bet, with tens of thousands of sales to prove it. I had an agent already, and I decided to concentrate on the interest from Amazon’s Thomas & Mercer imprint.

via Exclusive: Indie Author Michael Wallace Signs 5 Book Deal With Amazon | David Gaughran.

Go Read This (NOW) | Seths Blog: The future of the library

A really excellent post by Seth Godin on the future of Libraries in the digital world. I think that in it, he approaches the truth for far more then Librarians!

The emphasis added in paragraph two is my own. And I’ve added it because I believe that the role of impresario is currently waiting for someone to step into it. That might mean publishers, librarians, author or booksellers, who it is hardly matters in some senses, but there is a clear opening for someone to act as a central coordinator and promoter. Godin gets this, maybe some folks will listen to him.

And then we need to consider the rise of the Kindle. An ebook costs about $1.60 in 1962 dollars. A thousand ebooks can fit on one device, easily. Easy to store, easy to sort, easy to hand to your neighbor. Five years from now, readers will be as expensive as Gillette razors, and ebooks will cost less than the blades.

Librarians that are arguing and lobbying for clever ebook lending solutions are completely missing the point. They are defending library as warehouse as opposed to fighting for the future, which is librarian as producer, concierge, connector, teacher and impresario.

Post-Gutenberg, books are finally abundant, hardly scarce, hardly expensive, hardly worth warehousing. Post-Gutenberg, the scarce resource is knowledge and insight, not access to data. The library is no longer a warehouse for dead books. Just in time for the information economy, the library ought to be the local nerve center for information. Please dont say Im anti-book! I think through my actions and career choices, Ive demonstrated my pro-book chops. Im not saying I want paper to go away, Im merely describing whats inevitably occurring. We all love the vision of the underprivileged kid bootstrapping himself out of poverty with books, but now, most of the time the insight and leverage is going to come from being and fast and smart with online resources, not from hiding in the stacks.

via Seths Blog: The future of the library.

Go Read This | Kindle to Generate $5.42 bln Revenue in 2011 for Amazon: Analyst – International Business Times

How do you like them apples? Very much indeed. Even if this is out by say 20-30% the numbers are impressive!

First mover seems to have an advantage in this game. Those headline figures are pretty eyewatering. Nearly $8 billion by 2012? What’s more look at those margins circa 25% by 2012. Who wouldn’t take that?

“Since mid-2009, competition in the eBook market has been intensifying but, in our view, Kindle remains the most compelling eBook device and a material contributor to Amazons non-core business growth. In our view, in 2011 Kindle can generate revenue in excess of $5.42 billion and $1.21 billion in gross profit; by 2012 we expect at least $7.96 billion in total revenue and $2.00 billion in gross profit,” said Sandeep Aggarwal, an analyst at Caris.

Book titles reached 945,026 in May 2011, increasing by 47,000 over April 2011 5 percent month-over-month increase and by more than 740,000 since Kindle’s first anniversary.

via Kindle to Generate $5.42 bln Revenue in 2011 for Amazon: Analyst – International Business Times.