Wednesday, August 27, 2014
We have long argued about the logic of joining up the media dots. Some see this as merging the technology and using one technology architecture to deliver all services. Others see the services as remaining separate and simply offering a ‘one stop’ consumer umbrella, which collectively makes it difficult to compete with.
This week Amazon has acquired games streaming service Twitch for a cool $1 billion ($973 million). Twitch claims to be the fourth largest generator of peak load Internet traffic, which is greater than Hulu, Facebook and Amazon. According to Twitch it has quickly become the go-to-platform for the fast growing video game-streaming market. In July they claimed some 55 million unique monthly viewers.
Amazon’s media offer now includes physical books, ebooks, singles, print on demand, rare and used books, audio books, lending and subscription services streamed music, CD music, downloaded music, film rental and streaming, games and game streaming much much more. When you recognise that these can all be offered under one subscription service, Prime, as either supplemental services or the main offer, the picture changes. Kids Free Time is the only service Amazon has collectively offered under one proposition and subscription, but it isn’t hard to see many more such offers. Prime also unlocks the world of Amazon’s marketplace, goods of all sizes and shapes and a growing digital offer and physical delivery service which has collection points, same day delivery and again much more.
So is about building a ‘one stop shop’ and owning the customer’s first point of choice and if Amazon hasn’t got it, then its marketplace probably has. This now begs the question of why we bother to search on other services and don’t just go to Amazon first every time. After all, we will be soon conditioned to believe that that’s where we will probably get the best deal on everything and anything. Amazon gets first crack at unlocking our purse and getting our money and if the sale goes elsewhere through marketplace then they still get a cut.
So what about media and content? We know Amazon wants to take out the middle man. It is also becoming a producer, publisher, commissioner and much more across many media forms and not just selling books, films, etc. Does it want to be the only one? That would not make sense and would be unrealistic, but it will go for the quick wins and importantly go to win the hearts and minds of the self-publishing and creative-direct route.
What we have is an omnivore, which in its habit is creating a compelling consumer and creator proposition which is hard to avoid. No one only reads books, watches films or plays games and fighting a beast gets harder when it’s not just about one offer. Importantly the sum of the parts is its strength and that is not just with consumers, but with its competitors. Competitors and providers who have only a slice of the offer, have just that, a slice. They have to do that not only better than Amazon, but better than the rest who are fighting for that space. Niche is fine and can be very profitable, but it is just niche and growth is limited.
If you want to grow outside of the niche you have to find others who can help replicate what Amazon is doing internally. That’s Amazon’s potential weakness in that it has brought its offer inside. The companies may well operate separately but they are owned by Amazon. To compete then someone has to collect the same, similar or others into a group that acts as one but who remain separate. There are many opportunities but often little or limited vision or appetite for co-operatives.
To those who are searching for the synergy between Twitch and books and other media, forget it. The game is about creating a unique, compelling and universal offer and if it also provides some synergy then that’s a bonus.
Tuesday, August 05, 2014
How do industry bodies and major players respond to new entrants who offer something different? Do they go out to squash them in order to maintain the status quo? Do they attempt to reign them in and restrict their influence and impact? Do they invest in them and work with them to create new channels, new markets and new revenues? Some believe that many stick their head in the dark and wish them to go away?
This last week we have all read the Amazon Press Release over their ongoing battles with Hachette and one of the most relevant statements came right at the beginning in their reflections of the current consumer offer.
A key objective is lower e-book prices. Many e-books are being released at $14.99 and even $19.99. That is unjustifiably high for an e-book. With an e-book, there's no printing, no over-printing, no need to forecast, no returns, no lost sales due to out-of-stock, no warehousing costs, no transportation costs, and there is no secondary market -- e-books cannot be resold as used books. E-books can be and should be less expensive.
The somewhat throwaway line that caught our attention was that, ‘there is no secondary market ebooks cannot be resold as used books.’ With the revelations earlier this year about Amazon’s used ebook patent, we know that it has had its eye on this opportunity, but that the first sale doctrine is maybe a battle too far today. But used ebooks are almost certainly to happen and the change will be either driven by consumer demand or other start-ups who are prepared to push the envelope. It took the likes of Waterstones, Dillons and others some three years from starting to discount in 1991, to the collapse of the Net Book Agreement in 1994. It took years of patient lobbying for the B&Q and other large UK retailers to open up Sunday trading. It took years to change UK licencing laws. Things change in time and they change in favour of public demand.
Last month a judge for the District Court of Amsterdam ruled that Dutch used ebook reseller, Tom Kabinet can continue to operate while it is being sued in court by the Dutch Trade Publishers Association. Tom Kabinet enables users to resell DRM free and digital watermarked ebooks.
When Napster first threatened the music production business, the industry fought back through the courts and set out to shut down the new file sharers. The propaganda PR and lobby machines were wound up and the sound bites and messages broadcast. The political lobbing started as the industry set out to shut down the new file sharers before they could establish themselves. The problem was Napster was free and consumers made it go viral.
The music industry won its battle with Napster, but then had others to deal with who had watched the Napster battle and learned new tactics. Although the music business kept winning they also kept losing and by the time they tried to get the Napster brand under their umbrella it was too late and the stable door was wide open.
The music streamers came next. First there was Spiral Frog who failed to deliver, but they were followed by Spotify and Pandora who did. The big music producers had learned some lessons and bought into the service but also tried to tame it and minimise the risk to their model. However they failed to understand that the threat wasn’t free, nor was it sharing, but it was about the whole ownership ethos that they had profited from for decades. The streaming services asked why you needed to buy when you could access on demand, from anywhere at anytime. Spotify with its 24 million users, of which 6 million are subscribers and the other services started to redefined ownership and how we paid for and listened to music.
It’s amazing how long the music industry took to include downloads into its charts and that they have only just opened the door to include streamed music. Today 228 million downloads happen across the various services every week in the UK and that is up from 142 million in 2013 and 67 million in 2012 (Official Charts Company). The maths of how many tracks on average people download a week, is not hard to calculate and is significant. Some 41.5% of singles are streamed and 12% of the current top ten are streamed. The UK alone has delivered a staggering 18.5 billion streams and in 2013 overall market revenues from streaming pasted the $1 billion mark for the first time. Interestingly, while streaming has experienced explosive growth the overall revenues of the global music market have only increased by a mere 4.3% (IFPY and Spotify).
We wonder how long it will be before they fully recognise the impact YouTube has made and that some suggest that more kids now watch their music today than listen to it. Interestingly, the success of streaming is negating the demand for used digital sales and in a market where growth is clearly in a new ownership model enabling secondary sales makes sense and will generate further income for artists.
Change will happen and denying used digital media a second life and sale will increasingly be seen as wrong and an untenable position by the people that matter the consumers. Denying a second income opportunity also impact creators at a time when their own first sale income is increasingly not meeting their expectations and the pool is being shared with even more fish.
Unlike music, ebook consumption is relatively low and prices relatively high and this will reduce some of the appeal of on demand ebook subscription services. The book market will remain a mixed economy for the foreseeable future with physical, digital, see through and subscription offers. Perhaps it time that publishers work with new stat-ups to create and support a thought through and complimentary used ebook market and not wait for the collapse of the restrictions they have today and the chance that the result may not be favourable.
Thursday, July 31, 2014
The problem with any open confrontation is that often things that were really said in public have a habit of rising to the surface and becoming public. Public Relations people then try to put them back into the box, or rationalise the issues, but often the damage is done, or the public’s perception has changed. Propaganda is a powerful tool when communicated effectively.
Today’s standoff between Amazon and Hachette is becoming increasingly visible to the public. Some would say that the majority of book buyers are more concerned about getting the right price and service for themselves than they are about the trading terms between publishers and retailers. This makes sense and for many it is as if this battle is taking place on another planet. But then we introduce the emotive strings and issues that attempt to sway opinion. Not many care about the plight of the main protagonists, but introduce the authors and that changes things a bit. One side infers that authors are being exploited, and the other also says that they are being exploited or harmed by the action. Some would suggest that the author is are mere pawns in this battle.
We now have Amazon making a public statement ‘Update re:Amazon/Hachette Business Interruption’.
The statement is logical from Amazon’s perspective and makes arguments for lower ebook prices, which reflect the reduced usage rights, plant and distribution costs. They suggest a price point of 9.99, but also recognise some books will cost more. They put forward their revenue model split between themselves, publishers and authors and then say we’ll give you 70% and you guys can sort it out the division between yourselves. They argue that lower prices increase volume sales which in turn create greater revenues for all.
What Amazon have subtly done is drop a PR bomb into the publisher lap. They have questioned the royalty paid to authors, knowing that their suggestion is higher than what publishers gives. They have started to make the public more aware of the differences between the usage rights costs and pricing of ebooks, and in doing so promote themselves as consumer champions. This interestingly moves the debate into the public arena and starts to set the public argument and seize the public initiative.
Can the publisher respond effectively and seize back the propaganda war, or will they aim to muddy the waters and strike back with a fresh angle of attack?
What we are seeing can only benefit two people in the end, the author who will demand more and whose case is being strengthened by the day, and the public who will get cheaper books as the ebook RRP comes under pressure. Will it benefit Amazon over others, or will others benefit from the stance taken by Amazon? Will others step in and try to broker a deal or will Amazon simply and suddenly capitulate knowing that they have already scored their points and leave the fight for another day?
Tuesday, July 22, 2014
Battle lines are being drawn in the digital book arena and these are changing both in terms of goals and measures of success. The changes taking place may appear relatively small and tactical today, but their impact could be significant over time. How long they will take to deliver change is questionable, but that they will, is inevitable.
Although there is much noise in the market and many are merely shouting about what they are doing and it’s often hard to determine noise from substance and authority. It is also has to be recognised that different sectors have different issues and drivers and nowhere are there any silver bullets.
We would suggest that are five shifts taking place with the Trade environment. These are all at different stages of evolution and moving at different speeds, but will spawn more change.
Interestingly, as the overall digital market will be shaped by all of them, it may not be wise to simply cherry pick the ones you think apply to you and ignore the others.
We are now starting to see the emergence of serious players and offers. Interesting, they have all pitched the consumer reading demand at the high end and made ‘one price fits all’ offer.
Subscription offers need to be geared to individual needs and yet encourage members to read more. Just having the biggest library to choose from and expecting readers to consume 3 books a month is not the answer and niche genre offers are essential as well as recognising variable reading demand patterns which will keep members hooked. Today the churn rate is unknown and we suspect it will be quite high in the initial period and therefore these services need to develop secondary community draws to compliment and add subscription value and not merely appear as one trick pony’s. We would expect them to follow other media subscription services and align themselves to larger and complimentary subscription lists and this is essential as long term as subscription offers continue to consolidate their customer facing propositions.
The old and somewhat irrelevant buy to own model that prevailed in the physical market is fast becoming exposed. Although we have yet to see the ebook used market happen, with only the Dutch service Tom Kabinet is challenging the courts, it is inevitable in a highly restricted market.
However as used books, DRM, watermarking and on demand streaming services all overlap, maybe the emergence of on demand means that we no longer have to test the first sale doctrine and the used ebook market never happens. But unless on demand occurs, the used sale market potential for ebook is bound to be tested and found wanting and it is inevitable that the courts will eventually fall on the side of the consumer.
One of the challenges is about proving ownership, which with DRM should be easy, but with the current DRM walled gardens is almost impossible. Again with watermarking it should be also possible, but without a registry and standards conformity, is again almost impossible. With no DRM, no watermarking and no registry some would suggest that this is like closing the stable doors after the horse has bolted.
We are firm believers in the democratisation of writing which is currently exploding in the digital market and will continue to grow for the foreseeable future.
Self publishing is no longer about the slushpile of aspiring writers all wanting to be the next EL James, but about the ability of anyone to bypass the intermediaries and express themselves and publish their works. It facilitates small publishing ventures as well as new and established writers. They may select to use outsourced services to polish and refine their work, or simply publish themselves.
It challenges the ability of the intermediary to control what is being bought and read and can level the marketing playing field. The bestseller will still be a bestseller, but increasingly the backlist and midlist authors will now have to do more themselves to promote their works and in doing so find themselves head to head with others who have self published and earn a greater percentage of the revenue they have generated.
Can traditional publishers use the self publishing services to feed their lists, or have they now lost that opportunity? Maybe it’s down to the value they will offer the writers and that may have to be more than just a ‘safe home’ and a brand.
As author earnings continue to be squeezed by net receipts, reduced advances and more competition, the publisher profits from digital have been seen to grow. Maybe the widening gap is down to bad PR and communication, but the writers are increasingly aware and continue to be the ones who create the initial value.
One area that is very visible to authors under the KDP and other self publishing services is their sales reporting and revenue payments. As the authors will demand greater transparency on earnings, speedier payments and an increased revenue share, there becomes less hiding place for publishers.
Publishers do add significant value, but now have to increasingly demonstrate this and one potential knock on effect will be a revision of digital rights to term based and separation of these from print.
Content, Context and Community
In the main, the market continues, to merely pour the physical content into a digital container.
Some would suggest that this is short slighted and ignores that it is just a transient step and some would even argue is the equivalent to performing self-harm. We don’t say that all ebooks must go down the multi media experience route, far from it, but that we should be thinking about the user experience and making the digital rendition complimentary and not just substitutional.
Digital also offers significant opportunities to grow author, genre, reading and writing communities. These may be devolved to others better suited or motivated to organise and curate. Digital also expands the ways in which works can be discovered, validated and valued which applies to both digital and physical renditions. It is no longer about describing books to place them on dry one dimensional shelves, but about enabling them to be found in many ways within a virtual environment. Standard bodies think library and bookshop shelving, but today’s buyers don’t.
Too many what we have said, is not relevant to their business today. They may wish to sit on the fence and wait for it to happen and expect that they can respond quickly. To others they see these changes happening, new opportunities and the ability to position themselves for tomorrow and not run the risk of being too late to the party.
Thursday, July 17, 2014
Today, the market is talking about the Amazon offer, Kindle Unlimited, which certainly is a smart name as it aims to do exactly what it says on the tin. It should come as no surprise and it was only a matter of time until Amazon entered the ‘all you can read’ ebook subscription arena that services such as Oyster and Scribd have started to open up.
We have long argued that the subscription model is coming and that it starts to change how we relate to books that now can be effectively ‘borrowed on demand’, without having to worry about collecting them on virtual shelves, kidding yourself that you own them when all you own is a limited licence, and also trying to work out how to pass them on to others, share them, or divide the family collection when a relationship splits up.
The greatest challenge to the subscription market is matching the economic model to the reading habits of the members. The book clubs of old used to force feed ‘book of the month’ and expect a regular purchase, but they were dealing with relatively more expensive books and accepted that many people didn’t read on a regular rate. Importantly publishers often had Book Club royalties written into their author contracts. We now have ‘all you can read ‘models which are based on a flat monthly rate with an open to read offer against a digital library. Book s only earn when they are read and ensuing the definition of ‘read’ is a relatively minor but interesting issue.
Unlike other media subscription offers in music and film and even audio the demand and usage patterns of ebooks are very different. An ‘all you can read’ model may appeal to high volume readers who actually don’t need an incentive to read, or buy books and probably read a high volume of what they buy. It doesn’t necessarily appeal to readers who have a more erratic habit, or who collect ebooks today and don’t get round to reading them. So churn rates will be very important both in the early days and within the subscription cycles and will be probably very high compared to other subscription services.
Amazon launched Free Time in the US some 18 months ago. The service was aligned to their Prime subscription model and offered access to several media forms and importantly was aimed at parents for their children. It is not clear how successful this offer is today, but it did have all the right ingredients and if it were extended to align with Unlimited would make commercial sense. Amazon will have learned a lot from this exercise and obviously have a huge volume of customer information and reading habit data to mine and exploit. Unlimited would potentially give ‘family’ offers which cross media, align with Amazon’s core Prime service and effectively lock in customers. Importantly they will be very difficult to compete with as others would appear one dimensional and limited in their potential. However the economics of such an unlimited cross sector offer would be complex and maybe a bridge too far with suppliers today, but Amazon will have learnt much from Free Time that others have yet to discover.
Amazon has aligned Unlimited to their Lending Library and those publishers and authors who opted for this service channel now are automatically lifted into Unlimited. A smart move by Amazon and one that gives them instant traction with both content and users.
So is there room for Amazon, Scribd, Oyster and will Kobo, Apple and the ailing Nook follow? What will Wattpad do now? Can Amazon extend the Unlimited offer to make it even more compelling with premium offers on audio, film, music and even cloud services?
We just can’t see sufficient market for all players as they are position today and it will be interesting to watch the strategy adopted by others. Amazon’s Achilles heel has often been their loner approach and there are many huge subscription services that could be seen as complimentary for others to align with and thereby protecting themselves from being seen a ‘trick pony’.
What’s in it for publishers? What’s in it for Authors? How do digital distributors such as Ingram respond? How does this impact the public library debate and services such as Overdrive? There are many unanswered questions and we are only at the start of a journey which will have many barriers to negotiate, but we now are starting to see a divide between physical and digital which may prove to be healthy. The books may unfortunately remain the same but the divide between ownership and licence, between buying to maybe read or as a gift and subscribing to consume, an incentive to read more as opposed to decorating physical and digital shelves is now potentially up for change.
This is a good thing for consumers who read. It could be a good thing for digital media users. It may get more people reading. But there are others within the value chain for which this move has many uncertainties.
Amazon Free Time: Give me a child…. Dec 2012
Subscription Is Coming June 2013
Monday, July 14, 2014
This weekend in a quiet small local market in Bath we came across two stalls which caught our eye. One was selling lampshades at £75 each and the other origami objects. The thing that was interesting was that both were using printed books as their base material and draw.
The lampshades used a pile of books as their base which had a hole drilled through them in order to support the shade and fitment. The stallholder commented that several people had objected to her wares and that she was finding it difficult to get the books as charity shops wanted to sell them or they were destined for landfill. She roughly had desecrated some 100 plus books just to create the lampshades she had on display. We quite like the look of the leather bound set of short story books but they were now holed.
The Orinoko origami stall obviously had no problems getting hold of stock to cut up and fold as they proudly worked in partnership with BookBarn International who were advertising themselves with flyers claiming, ‘Invest in the future of books!’ Orinoko proudly state, ‘choose the book you want from any Bookbarn International stock and get a 20% discount off the book.’ No doubt they buyer then brings their book along to Orinoko to be cut and folded into art. Some would suggest that this is not investing in the future of the book.
Last week we wrote about the British Museum’s ‘wheel of books’ and questioned the subliminal message it was sending out about printed books and art. Now we have further examples of books being used to create art in the best possible taste. But is the real future of the printed book?
Individual libraries and book collections used to define the owner’s taste, likes and reading but tomorrow will these be desecrated to reflect their art taste and regard for the printed book? Unlike landfill and pulping these new fashion and art objects are for display. Once out of fashion they are of no use and become yet more rubbish. But until then they will sit proudly on display no doubt alongside the stuffed heads of shot animals and caught fish and other trophies which define the taste of their owners.
Thursday, July 10, 2014
Some will say we are party poopers and that we should applaud and celebration the British Museum’s novel use of the book to create art, but is the ‘wheel of books’ just a cheap gimmick or we should we be mindful of what could be easily copied?
The British Museum’s newly refurbished bookshop got Lumsden Design, who are based in East London, to create their space and engage customers. At is centre is a two metre ‘wheel of books’ which sits proud in the shop’s window. It has caught people’s imagination and has engaged, but is it about promoting books for reading, or promoting them as objects of decoration? Is it simply reusing them to create a decoration and a one off piece of eye candy which is in fact in conflict with the objective of reading, or is it a subtle way to promote the book? After all we often love to see shelves of books face out, or stood to attention with their spines outs and is this any different?
What will be the legacy of the ‘wheel of books’? Will people now buys books to glue them together or to drill holes through them in the search of expressing themselves through art? Will schools now collect old books so their kids can create art and forget to read them? Will this decoration promote books as a tool for learning and an escape to fantasy or simply turn them into objects to be twisted, broken, and stuck together in the search of art? Will second-hand books now be snapped up by the yard to be experimented on in art classes and colleges?
We do applaud the other creations within the shop, which includes tabletops wrapped in black leather to recreate the original writing desks in the Reading Room where Karl Marx, George Bernard Shaw, Thomas Hardy, George Eliot and Rudyard Kipling all studied. It has also embraced the Rosetta Stone right down to the sales of merchandise such as umbrellas and cufflinks. But it is the ‘Wheel of Books’ that causes us to ponder, with its metal ring piercing through all the copies on the wheel, in order to keep them all in place just to create window art.
A few years ago some industry bright sparks thought that instead of pulping books, or sending them to landfill, prisoners in Her Majesties prisons should drill holes through them and in doing so stop them being resold, reread and shared. Thankfully the move was questioned and shunned, but today have we now discovered the acceptable alternative? Same result, holes drilled through the books rendering them unusable, but this time it is all done in the best possible taste.
Monday, July 07, 2014
We have all read about the decline of the independent bookstores in the UK and US. However, we have also seen the relaunch of Foyles in Charing Cross, the expansion of the Hatchards brand by Waterstones to St Pancras, the growth online of the bargain bookseller, The Works. So what is the future of the Bookstore and does it have a vision of itself in 2020, or is its vision somewhat out of focus and requiring both short and long sighted correction?
Stanley Unwin once said that, ‘To write books is easy, it requires only pen and ink and the ever-patient paper. To print books is a little more difficult, because genius so often rejoices in illegible handwriting. To read books is more difficult still, because of a tendency to go to sleep. But the most difficult task of all that a mortal man can embark on is to sell a book.’
Today more than ever before that quote reflects the significant changes and challenges facing booksellers. Some would say that the question of what is sold, is as important as that of how it is sold.
Today many continue to sell not just a narrow range dictated by their physical square footage, but a range focused purely on the new or only available through the publisher. It’s as if they haven’t read what it says above the door and have ignored the word ‘bookseller’ and replace it with ‘new books only seller’. Books are books and the consumer doesn’t grab a book and turn immediately to the copyright page and look as to when the book was published, so why do so many bookstore restrict themselves? In a market that over produces both in titles and quantity, there are many mint condition ‘bargains’ to be stocked from outside the traditional publisher channel. They may not have the ‘sale or return’ safety net, but they also can be often acquired at a fraction of the price. One of the salient lessons we should have learnt by now from the likes of Amazon, is that consumers want to buy new, old, rare, bargain and used books and to do so from one place where they can seen the full range.
A recent article in The Economist looked to the future design of the bookshop and asked four firms of architects and designers to create the bookshop of their dreams and in doing so reinvent it for tomorrow. The designers looked at many aspects and even covered the sale of used and digital books and using the space to sell lifestyle, create theatre and host events. It is worth a read.
However, they started from the premise that the hub was the bookshop and everything revolved around the book. Is that how we should look at it, or is the book merely part of a larger proposition based around a wider lifestyle offer? This obviously raises the question of range both in terms of width and depth. We have seen many acclaimed bookshops which have narrowed their offer to appeal to a segment of the market, but how many of these have actually complimented their book offer with a full range of products that appeal to that same segment? Does the cookery shop sell cookery product and books, or books and cookery product? Does the children’s bookshop sell toys, children’s clothes, prams etc. alongside books, or books alongside childrens’ product? Ex Borders UK head, Phil Downer has made his Calliope gift shop one that sells gifts which include books and in doing so he is able to cross sell and merchandise and adjust his offer to suit the market. Will books be a major or a minor element in years to come will depend on many factors, but ultimately it should reflect consumer demand.
The coffee shop within the bookstore is often a very good earner per square foot and creates lifestyle and greater selling opportunities. It is claimed that our obsession with coffee houses is going to grow by a further 20% by 2020. So would you open a coffee shop that sells books or a bookshop that sells coffee?
A further example of how market trends have changed well established markets is in the off licence sector, where the supermarkets have come in and not only wiped out much of the previous retail space, but also have actually expanded and grown the market. When supermarkets first started selling petrol it looked obvious and was restricted to their out of town supermarket locations, but now some have taken their supermarket offer to the garage forecourt and taken over independent stations which are convenience stores that sell petrol and this has enabled them to grow their convenience business and opened new locations miles from their supermarkets.
Just focusing on books is obviously a very limited consumer offer. Just selling new books could be terminal.
Monday, June 16, 2014
We read today of rise of self-publishing and the claims that ‘Self-publishing boom lifts sales by 79% in a year’ made by industry analysts Neilson and published in the Guardian.
Steve Bohme, Research Director at Nielsen, claims that of the 80 million ebooks sold in the UK at a value of some £300 million, 18 million were self-published at an average price of £1. So whilst the volume of self-publishing was a little under 25% of the UK ebook market the value of the sales was only half that at some 12%.
There are many questions about these and other self-publishing statistics. How much of the research is qualitative and how much is quantitative? How much is actual sales of all self-published books and how much is restricted to tracking industry identified book units (ISBN)? It is easy to be subjective, but the actual detail often remains inaccessible and therefore any statements and predictions often carry a word of caution. The time old practice of measuring the market by number of new books published a year, is becoming meaningless in this new virtual world, where multiple renditions often exists and the front list, or ‘new’, is increasingly hard to define. The industry failed to adopt the ISTC (standard work identifier) and as a result relating different renditions can be a challenge. Separating out the self-publishing titles is even harder as digital self-publishing is also not restricted to authors and is being used by agents and small publishers and we must not forget that it also includes print on demand channels such as Create Space and even audio.
We are however where we are and it is hard not to appreciate the massive explosion in digital self-publishing. This has been enabled via no cost and self service programmes such as Kindle Digital Publishing (KDP). The number of titles now taking this or similar routes to market is hard to accurately measure and therefore too are the sales.
We understand some of the self-publishing drivers, but we often lack the actual sales that are actually being achieved. Whilst some authors claim huge sales, some works sit on the shelf untouched. Prices fluctuate from free to a few pounds, but owners are often continually manipulating these prices in order maximise visibility and sales. As a result prices, although low, are all over the place, which in turn put pressure on the pricing of more traditional works.
Traditional publishing has developed, honed and established processes, relationships and practices from the author to the reader over many years. Although these characteristics may vary from sector to sector, in many sectors the prevailing model still remains largely one based on spread betting that is controlled by the publishers, where the winners compensate for the losers. Some bestsellers may be manufactured and according to their marketing spend be hits before they have hit the streets.
However, publishers are increasingly becoming risk adverse and in doing so are potentially now shrinking the number of wild punts they take.
For many readers the publication date has not been the buying driver and ‘latest’ often only means the newest to be discovered, not latest to be published. However, the publishers remain front list focused with what some would see as a mission to discover the next ‘50 Shades’, ‘Harry Potter’ and Christmas celebrity blockbuster etc. In the physical world the promotion and development of the backlist does not always generate the returns offered by a new bestseller. However in the digital world a strong and visible backlist can provide stable and sustainable income with little cost. This potential quick win is not lost on authors who have often got reverted backlists that are potentially waiting to be rediscovered.
The size of the content of a title is still being driven by the economics of the physical rendition. The distribution and metadata is still conforming to the physical supply chain needs. The rewards, rights and royalties remaining locked in a time warp as if digital never happened. We still think in terms of library and bookshop shelves and not virtual ones and restrict how we describe works to filling in predefined boxes. Digital books are still often restricted to sitting on limited shelves even though their appeal may be applicable to many genre. We are managing ebooks as if they were pbooks which again is opening up opportunities for self-publishers to self-publish and appear more relevant and focused.
The market share of digital to physical continues to be an industry obsession and in part is driven by the majority of the physical book content remaining identical to the digital with the physical content merely being poured into the digital container. We have created a cannibalising engine which although like other media will not entirely replace the physical, could seriously undermine the supply chain economics on which it works today. However, this is not the case with much of the self-publishing market which now sidesteps the often uneconomic print rendition. So despite Amazon’s Create Space print on demand service digital self-publishing is growing disproportionately to traditional digital publishing.
Self-publishing is being championed by those who control virtually all current ebook sales. The likes of Amazon, Kobo, Nook not only assign their own identifiers and do not make the ISBN mandatory for ebook self-publishers they actively promote their services for free with royalty rates that make even the best publishing digital royalties look miserable. Yes, publishers can add value by promotion, marketing, and generally help raise the visibility of their works and that may be appropriate for front list titles and those released in print but doesn’t always apply to back list, mid list which now find themselves fighting for attention alongside increasingly more professional looking self-publishing titles. It is very questionable why any author should allow publishers to simply digitise their back list without term time break clauses and a revision of royalty terms. The ebook services also add value to authors in showing current sales activity, royalty earnings and even pay on a monthly basis.
If we finally accept self-publishing is a growing force and segment within the market, how do we relate to it, measure it and respect what it offers authors and readers alike. Merely brushing it under the carpet or closing one’s eyes to it is not the answer as this will only deliver aftershocks and surprises. Locking authors into perpetual contracts for their backlist as well as front list will surely only come home and bite hard. Paying authors poor digital royalties that look to some greedy and to others just stubborn will only increase the flow to self-publish digitally.
It is often one thing to identify the threat and another to focus on the opportunity. Publishers are not structured to absorb self-publishing and by their nature are selectors and curators. We now live in an environment where anybody can publish a video on YouTube, perform their music in the social network arena, review whatever, write blogs, stories etc. This is to be embraced and supported and even though many still see it as a threat self-publishing actually compliments and can enrich traditional media publishing.
Some previously related articles:
Digital Warming and Self-Publishing , Feb 2014
Another Day at the Races, Feb 2014
Consumers Discover Self-Publishing, June 2013
Thursday, June 12, 2014
Does anybody know where to find Raymond Buxton?
It must be Summer and the heat must be sending some barmy with thoughts of erecting new toll booths to collect money every time a book gets sold.
Yesterday the news that secondhand reseller Bookbarn had entered into some sort of convoluted pact with the Authors’ Licencing and Collecting Society (ALCS) to effectively pay a royalty to authors on the sale of the used books. Someone at ALCS was obviously dreaming of a huge new revenue stream and a potential new role in life, or some misguided people believed that there was any quick win and a pot of gold without thinking through the implications. Bookbarn‘s motive for doing it is not known.
The ALCS has always been actively looking at ways to increase their members’ earnings but the practicalities and economics of the scheme should be seriously questioned and its potential impact evaluated within the industry and across the value chain.
First of all can we define a secondhand or used book and when is a secondhand, thirdhand or even more? What is the difference between rare and antiquarian and used paperbacks? Are public domain works to be included or excluded and who will identify which qualify? What happens with foreign works and editions? Is the toll based on individual resale value or retailer’s revenues or some sort of honesty box? What happens with the sale of orphan works and how are these to be identified? Do charity shops and car boot sales have an exclusion or are they to be included? When a return is resold is that still mint or now deemed secondhand? Defining degrees of used is itself going to be a challenge.
ALCS may be good at collecting photocopying revenue but this is a different and far more complex world.
The book is still under the copyright ownership of the author but it has also been produced by the publisher who currently only earns on the initial sale. Unlike artworks, there are others who have been involved with the production and development of the book being resold. Should any collection agency succeed in collecting used sales revenues could the publishers also lay claim to some of the bounty? Should the agent who facilitated the original deal also be rewarded? Is the money collected to be shared just between ALCS members?
There are many more questions which we presume all have thought through and have answers for.
It is not clear whether the sales to be recorded like artworks as unit sales or managed as collective sales and revenues spread by percentage sold, like PLR lending’s across members? What is the administrative overhead of the operation and is the revenues exclusive to ALCS members and what happens with international authors who don’t belong to ALCS?
Anyone familiar with the music collection services such as Performing Rights Society (PRS) would appreciate that their approach to collecting money can sometimes be viewed by some as intimidating and somewhat arbitrary and that the administration costs of such collections can outweigh the benefits given to individuals.
The Artist’s Resale Right, or Droit de suite became an EU directive in 2001, and was enacted in the UK in 2006 but todate has delivered questionable benefits to artists and it is claimed that instead of tens of thousands of artists benefiting, only 1,104 artists benefited, of which only 568 were British”.
So instead of creating a questionable and some would say unworkable sledgehammer to crack a nut, why don’t we address the basics and first establish a rights registry and identify exactly who owns what.
Friday, June 06, 2014
The papers are full of anti-Amazon rhetoric which some may suggest is being whipped up into a feeding frenzy within the publishing marketplace. Amazon is being portrayed as the biggest bully ever to have stepped into the publishing arena. But is this the case or is it another attempt by the publishing majors to wrestle back some of the control they happily gave the Seattle company, or a genuine grievance? How do consumers feel about the latest public spat, do they really care and how do they actually perceive Amazon? Do authors side with the retailer who has more than any single entity extended their market, or do they side with the publishing majors and those A list authors who may be suffering in this conflict?
The issues facing the ebook publishing marketplace are wide ranging and often interrelated, but often these only get raised and discuss as individual issues. Some would suggest that the book supply chain is adversarial by nature and can often be seen not as a supply chain, but as a ‘blame chain’. Yesterday it was the book chains and their greed to secure additional discounts, today it is Amazon’s same battle at a time when some major publishing houses are declaring profit rises due to digital sales and growth. It’s somewhat ironic to wind to the clock back just a few years to when publishers were claiming the true costs of digital were far greater than many envisaged and they were losing out and couldn't pay authors more.
The digital market has shifted significantly and mainly thanks to Amazon and its continual exploration of the marketplace. They have given us and invested in Marketplace, Creative Space, KDP, Audible, ABE, Goodreads, Singles, Kidsspace and much more. They have raised the bar re author royalties and whilst many publishers have started to raise the digital royalties, they all too often pale into insignificance compared to those offered by Amazon and followed by their competitors. Publishers claim that they can make the difference and ‘make a book happen’, but although this may be true in the physical market the digital one is effectively owned by Amazon. Interestingly Amazon have also opened up the digital honesty box through KDP and in doing so have given authors transparency on daily sales by title and region and paid them monthly, again with total transparency.
If we step back and look at some of the digital issues some would suggest that we often have little appetite to change and more easily accept the status quo, often letting others take the risk and waiting to see if they fail or succeed. We have lurched from knee jerk to knee jerk with the likes of the ill-conceived Google book Settlement and Agency moves. Some would suggest that these were primarily aimed at bringing in Google and Apple to compete with Amazon but on their terms.
Today we have a marketplace that is still fixated with front list in a digital world of virtual shelves that provide equal space to all content, irrespective of its age. We have no, or few price points that are recognised by consumers and this just promotes discounting across titles that should not be discounted. We have continue to pour the physical into the digital container and believe the job is done and in doing so undermine the physical product and marketplace. We have generally failed to create new digital content that encourages reading and compliments the physical book as Charles Dickens and others did in the early age of mass reading and have choosen instead to stick with the 256 page model fits all?
There are only two entities that truly matter in the value chain; the author who puts in the creative content and the consumer who puts in the cash. All the others have to add value and not just cost but also have to often co-exist to maximise the efficiency across the chain.
Thursday, June 05, 2014
Today many continue to pour the physical book content into the digital container and believe that they have addressed the digital opportunity. However many have also adopted the same approach to contextural data, metadata, bibliographic, burbs etc. It’s as if we think that what works in the physical world is equally applicable in the digital one.
Is this blind faith approach down to a conscious decision to do as little as necessary and incur as little cost as possible, or is it a fundamental misunderstanding of the digital environment? Some would suggest that it’s like continuing to distribute AI sheets like confetti via a fax machine in the email and internet age.
Way back in the eBook dark ages (the late ninties) we were part of the highly acclaimed publishing research series edited by Mark Bide and Mike Shatzkin, ‘Publishing in the 21st Century’ and one of the reports we produced was simply titled ‘From N to X’ and was about the growing importance of Context (metadata) over Content. What was clear then was that discoverability was as important, if not more important than the content and finding that digital needle in the Internet haystack was going to be a challenge to all.
Interestingly, the industry choose to retain their physical taxonomy of classification and apply restrictions often that only applied to the physical world. It as if all we could see was physical shelves and we had to place the titles thus. ONIX which did much to provide structure for the physical B2B supply chain started to become increasingly irrelevant in the B2C ebook supply chain. The major ebook retailers all adopted their own classification taxonomies some permitting many genre classifications others a few. Keywords became important but the response was varied. The important blurb was often just the physical one again merely poured into the digital description. Some indexed the first chapter, others the whole book, but searching index words often then became highly subjective and often irrelevant to the intended search. As seen with some generic search engines today even your individual profile may present different search results to others.
Some battled with the semantic tagging of the likes of illustrations. Some sectors recognised the importance of citations, references and continued to support those established to manage these in the physical world.
The point is that we have a very rich bank of potential information that can aid discoverability and qualification. The richest source of content metadata being in the book itself. Some 95% of all contextual data is available via the book with the remaining being often available via hyperlinks.
The other source of information comes from our own profiles on our tastes, preferences and habits. Some will say that one of the reasons why social book sites work well is that they aid discoverability, recommendations and thereby add context. Its little surprise therefore that Amazon bought Goodreads and have just launched their Twitter relationship. Book recommending social services have mushroomed but have they actually increased sales to the same proportion or are they just an extension of today’s ‘me too’ social dating society?
We therefore need to rethink what we give away to promote, aid discoverability and add value to drive sales. Merely to continue to pour the same physical information into the digital boxes is not going to work. Equally waiting for the white knight to provide the solution may well now carry a health warning.
Wednesday, April 30, 2014
Today we are alarmed at the report in The Bookseller that Kobo and Fast food chain McDonald’s are teaming with, Hodder Children’s Books and National Literacy Trust (NLT) to give away ebooks to children when they buy a Happy Meal Box at the fast food chain.
Every Happy Meal box will come with an e-book voucher, which will allow customers to download a Famous Five book by Enid Blyton from Hodder Children’s Books. This new promotion is in addition to the existing one, where boxes contain one of six of Blyton’s Secret Seven stories and a £1 voucher that is redeemable to buy a Secret Seven or Famous Five book at WHSmith or Eason.
The World Health Organization (WHO) regards childhood obesity as one of the most serious global public health challenges for the 21st century. The latest UK National Child Measurement Programme (NCMP) figures, for 2012/13, show that 18.9% of children in Year 6 (aged 10-11) were obese and a further 14.4% were overweight. Of children in Reception (aged 4-5), 9.3% were obese and another 13.0% were overweight. This means almost a third of 10-11 year olds and over a fifth of 4-5 year olds were overweight or obese. Results from the Health Survey for England (HSE), claim that some 28% of children aged 2 to 15 were classed as either overweight or obese. However, it should be noted that imbalanced diet is only one cause of the steep rise in childhood obesity
Early this week we wrote 'Do we continue to have Ketchup on our hands today?' referred to the article on the content of McDonald’s Hamburgers 'Hamburger Chef Jamie Oliver Proves McDonald’s Burgers “Unfit for human consumption”' and questioned the industry’s continual support of promotional the ‘free book’ programmes via McDonalds.
Kobo is probably getting used to controversy.
On a separate ethical note, last month, we raised in our article 'Does Rakuten Deal In Blood eCommerce?' the exposure by the Environmental Investigation Agency (EIA), of Japanese retail giant Rakuten, who own the likes of Play.com and ebook operator Kobo. Their report claims that Rakuten is the world’s biggest online marketplace for elephant ivory and whale meat products.
On a further separate ethical note, last year Kobo, WHSmith's eBooks partner also had to quickly respond to complaints that pornographic e-book material appeared alongside children’s literature on the W H Smith website. Kobo said this was as a result of “a select group of publishers and authors violating the self-publishing policies of our platform". John Whittingdale, chairman of the Commons Culture, Media and Sport Select Committee at the time, said it was “it is unacceptable that anyone could access this material within a click of a mouse.”
Some may suggest that the apparent lack of an ethical code by some would lead others to question the true price being adopting in getting people reading.
Tuesday, April 29, 2014
So what will be the next technology must have and what will drive its adoption? Will media come second and merely follow new technology?
In the last decade we have seen the transition from fixed location desktop PCs, through luggable laptops, the life and death of the notepad, the ‘air’ laptops and the explosion of the tablet. We have seen single functional devices such as the eink ereaders come and almost go, the transition from games only consoles to games anywhere, the death of the music only iPod and Zune and those video movie players. Home entertainment devices and interoperability has been redefined. The app, the cloud and streamed media services have arrived. Today the smartphone, or computer in your pocket, has taken over all our lives.
It has been a decade of significant technological and culture change and is unlikely to stop or even slow down as the technology shrinks, gets more powerful and anytime, anywhere and at high speed continue to drive our thirst to be connected. Our interface with technology is becoming more intuitive and although we may still be some distance from Pranev Mistry’s sixth sense world, it’s coming.
So how are the media and creative industries responding? What can we expect to see soon and what is still stuck some way off?
If we just look at film, music and books we see that although technology has increasingly impacted the development of the stuff, the output is the same. Films are still 90 to 120 mins long and apart from some 3D and computer aided technology the majority remain as they were. Music still retains the same length of tracks and although the technology has dumbed down the quality of content, a song is still a song. Books remain books with the vast majority of ebooks being straight digital renditions of the physical book.
However, there is a significant difference between books and the other two media. Film does not exist in a native technology free form, Unless you count the theatre and live music performances, both Film and music are very different cultural experiences and consumer purchases and not something you can put on the shelf and replay at will. Music has evolved through a series of disruptive technology changes, from vinyl, cassettes, 8track, CDrom, to today’s streamed MP3 on demand. Vinyl may be enjoying a small and limited renaissance and success in clubs, but for the average consumer it’s only like discovering a pile of old 78s and then looking for the device to play them on. The gramophone players, Walkman, ghetto blasters have gone and today we have the personalised earpiece connected to the smartphone and the cloud.
Books are different. Books remain and ebooks are a competing new rendition like the paperback was to the hardback. This difference challenges the ebooks ability to be a disruptive rendition and to kill off its previous forms. Book technology and the reader goes back hundreds of years and isn’t broken, nor is it made obsolete by the new form or its evolving technology. Therefore eBooks over pBooks is not a straight binary decision choice.
When we first grappled with the ebook in the 90s we often tried to enhance and exploit the content with the technology. Many fingers got burnt and so when it returned under the eink revolution, many kept it simple and also found that the eink technology didn’t exactly encourage content enhancement. However as tablets, mobile and smartphone technology become ubiquitous some may now return to enhance the content. Others may choose a different route and abridge it, or even play to the strengths of the technology and embrace the obvious – the short form.
Whatever the route taken the stupid thing would be to continue to merely pour the same content into a digital container. This logic is flawed as it not only creates competition where competition is not needed and can be counter-productive, but it fails to understand the technology, the cultural changes that are happening and the opportunities that are available for the two that matter - the author and the reader.
Monday, April 28, 2014
When we look at the Amazon dashboard we are often confused as why, or how, there can be the odd one ebook return. After all you can see everything you need on the screen, make your mind up and even sample the content before you buy, so why is there a refund. The official Amazon policy on returned eBooks is: 'Books you purchase from the Kindle Store are eligible for return and refund if we receive your request within 7 days of the date of purchase. Once a refund is issued, you will no longer have access to the book. To request a refund and return, visit the Manage Your Kindle page. Click the Actions tab for the title you'd like to return, and select "Return for refund"'
Some would suggest it reflects Amazon’s customer-friendly return policy and others that it’s easier for them to do than other services where the horse has literally bolted out the stable door and isn’t coming back. Some go as far as to suggest that it's like going into a restaurant, buying your meal, eating it and then getting your money back.
Barnes and Noble state that 'Once purchased, eBooks cannot be refunded.' and this also is the policy of Sony who state 'Please confirm all purchases before you complete them as all sales are final. There are no refunds for digital content.' Kobo Books doesn't provide information on their refund policy and consider all sales are final and once the services commences, customers cannot cancel the contract or payment. The iTunes Store Terms of Sale, also state that all purchases made on the iTunes Store are final. This policy matches Apple’s refund policies and provides protection for copyrighted materials.
However, we now read in eBook Fieber.de bout a change to German consumer law that potentially gives everyone a no quibble return window of up to 14 days on digital products. These new regulations come into effect in June this year and will require online retailers to offer refunds for ebooks and other digital downloads under an extended “right of withdrawal”.
So you buy the ebook, quickly read it, then return it within 14 days and you get your money back. The question is how will retailers stop abuse especially with respect to services which don’t synchronise activity post download?
Retailers will have the option of trying to get consumers to waive their right to a refund and no doubt the small print may be about to get even longer and smaller.
We had to look twice to ensure it wasn’t April 1st, or a spoof by the German equivalent to The Onion, but it appeared not, so someone in the German legislature must be just having a laugh.
Well since then we have all read many reports about how childhood obesity is getting worse and is being part fuelled by the fast food outlets, but last week an equally important and alarming article was published by the Mind Unleashed organisation entitled 'Hamburger Chef Jamie Oliver Proves McDonald’s Burgers “Unfit for human consumption”'.
We will not say any more except to ask why the publishing industry continues to support promotional programmes which would appear to be at odds with any reasonable corporate ethics and moral policy?