What books will be

Publishers do not sell books – they sell content. Nothing new – I hope… – here. But in the digital shift this is more important than ever. This content may certainly center, especially at first, around books. But these will become something different from what are now. Four are the main forms that this content may take, it seems to me – I will talk about three of them in this post, and leave another one (the most interesting to me) to the next one. So:

Books as, well, books.
That is, the same content you’ll find in the bookstores, hopefully with a better structure and redesigned to best suit the different devices on which you will read the title. Apparently a simple task, in fact there still is a lot of work to do – and I believe that finding a new structure for the content will be an exciting feat for designer in the near future.

What are you selling here? Content in the form of an almost traditional book.

Books as networks.
That is, a book that explores part of the inner references it contains. If you are reading a novel that is part of a wider saga and you encounter a new character, a link may bring you to a brief description of who that character is, or to a crucial passage in a previous novel. If a passage has been quoted in other works, you may click and see the paragraphs from the other works and see how the passage you just read has been interpreted by other authors.

And much more. This kind of books add more layers to the main story – layers that one may or may not want to explore, but that may be interesting and turn useful in many cases. Books become in this way deeper in a quasi-physical way, as you may start following a link and follow a separate path from the main story.

This may also well be a rights nightmare: what will you be permitted to do? Will you be able to just look at citations from other titles? Will you gain access to entire books? Will you just gain access to brief articles that explain some passages? Will the agent/author permit you to alter the original text? And is this altering a text, actually? And on, and on, and on.

What are you selling here? Content in the form of links, references, quotes, added information. A content that explodes in a rizomatic way, closely linked to the main story, but that builds on it to create something different.

Books as gadgets.
This may be, well, everything. Take a book, and add images or videos to describe a character or a landscape. Put games in it. Add a soundtrack. Have actors read the text. Work with the net – link to websites, forums, create micro-communities or websites centered around the book itself. And many more things.

Not that I believe these will all be great ideas. In fact, I believe that the other options will be more successful and in the end will reveal themselves to be the real innovation.
But for some kinds of books it is well worth a try in the path to gadgetization. Think children books, or celebrity books. Think singers, or war reportages.

What are you selling here? Content in the form of a variety of media, all orbiting around a core content that is the spark for many different contents.

In the next post, books as…

On fragmentation, aggregation, and communities

Let these words be carved in stone:

a multi-niche publisher has a big advantage over a general publisher, just as it does over smaller niche players. But the ground for the general publishers is about to shift in ways that will be even more challenging.Because “book publishing” in an increasingly vertical world is less and less about content sales in the unit of “books” (although that will be the lion’s share of revenue for a long time) and more and more about sales bigger than the book (databases that stretch across many books and other things too) or smaller than the book (chapters or fragments that naturally stand alone or which address a particular content need.) The iPhone app as a unit of delivery is accelerating the latter trend. The value of a database across titles has long been demonstrated by O’Reilly’s “Safari” offering, which generates more revenue for them than all but one trade account.

As the percentage of a publisher’s revenue that is generated by fragments and aggregations rises, so does the value of being vertical and, especially, so does the value of a direct relationship with the end users. The fragments piece is especially important, especially challenging, and requires new ways of thinking (and perhaps new contracts.)

I’m more convinced every day that passes that the real revenue for publishers will be in everything that surrounds the book more than in book sales as-we-know-them. Not only fragmentation and aggregation promise new landscapes that may be exploited in creative ways, but for example I may think to communities built around editorial content, user-generated content and books – maybe a selection of a publisher’s books that focus on the same topic – given away for free or almost, where the revenues are not generated (necessarily) by sales, but in other ways. If a publisher (if any firm, in fact) can aggregate a tight community of people bound by similar interests, plenty of ways to capitalise on it will present – and advertising is just one of them.

But for all this experimentation, as Shatzkin says, a new thinking and new contracts will have to come up.
And contracts will be particularly difficult to change, because right now protection seems to be what everyone is searching for, and every right is given with great caution, keeping extreme attention in preventing ways of exploiting content different than those explicitly granted.
In fact, I cannot really believe this can go on for long, as in the extremely fluid space of the net there is more space for creativity than you can think of, so contracts will have to become a bit looser – or, better, wider-encompassing.
In a new model, content may just be something to gather people round, and not only the final product. It may not only be an end, but a mean.

Anyway, this is sci-fi, for now.
For now publishers are planning to sell the same book you’ll get in the bookshop (well, probably with a far worse layout) at 12 bucks. Good luck with it.

The price of peritext

Been away for a few days from the blog, and got a lot of things to talk about.

First of all, an interesting piece by Joe Wikert

As Joe points out talking about Logos, much can be accomplished by stopping thinking to individual e-books and starting thinking much bigger.

It seems that content is no more king, or at least that it’s not the only king in town. The context is gaining more and more importance. Not that this is anything new, but examples are more and more under the eyes of everyone, and Logos is just a first one. This is an interesting declination of the network – not only as a network of people, but as a network of texts. The revenge of the bibliographer, sort of (and I’m convinced that getting back to reading some Gerard Genette or Donald McKenzie will turn out to be very useful in a short while)

This may also be a passage towards what might be called the gadgetization of books – the traditional book opens itself to its para- and peri-text, and to other media as well, and becomes something different, at the same moment in which it explores all its possibilities.
What may be sold is not only the book itself, but a cloud of ideas, references, inspirations that were cristallized in the book.

And this half-book-half-gadget may also gain enough value in the eyes of the consumer so that a higher price would be justified. What strikes me in The death of Bunny Munro e-book is not its success, its high-selling price or whatever. It’s the fact that it’s a big chunk of work by Nick Cave, beautifully crafted and put together – it’s not an e-book, not a soundtrack, it’s more than that, and than the sum of its parts.
It’s no surprise, actually, that it can be sold at a high price – also thanks to the lack of high quality e-books and the rudimentary phase of the market we are in (but we already talked about that).

On this same path, an impressive video was the one by Penguin CEO John Makinson that showed what Penguin is working on for some of their titles.
This is certainly not the only way to go, but it definitely is one way to go.

Tidbits – Social tools

With the rise of social tools, we’ve been publicly reclaiming ourselves – publishing blogs, joining social networks, and connecting and sharing information with each other on a global scale. As a result, a shift in values is underway, where privacy, gatekeeping, and the preference for information silos is being replaced with new expectations of publicy, openness and transparency. We’re still exploring the implications of this transition both for our personal identities and for the role of the business organization, but there’s the potential to redesign the system in a way that’s fair, participatory, and human.

But how?

A part of it is in understanding the composition of our social networks, and the skills, strengths, and relationships that are embedded within them. At the organizational level, knowledge is often separated by department, and at a larger scale it’s separated by the notions of producer verse consumer. These barriers no longer make sense. In order to take advantage of hidden insights and innovative ideas, there needs to be a way to understand who’s who and how to get the information flowing through the proper channels.

A tool that would map the connections within a network combined with a ‘human capital’ assessment could aid in this process.

Venessa Miemis, Tapping the network to facilitate innovation

Some thoughts on Nielsen’s paper on paid content online

Nielsen just published a research on the behavior of consumers concerning paid content on the net. Although it doesn’t tackle directly the e-books market, it provides some very useful insights on the distribution of content online, and may spark some ideas on possible business models. Any result is, of course, not the final word on it, as the landscape is changing any minute. Still, let’s sum up a few topics.

Contents for which people are more likely to pay are those for which they already pay offline. More specifically, music and games are the two segments where the majority of people already paid for content. They are also two of the most established segments, that have been selling paid content for longer, but are also (I’m guessing here, but it should be a safe bet) the two segments that appeals the most to younger people.
And – see page 3 – younger people are the ones that are more willing to pay for content. Counterintuitive, as the research itself  states, but also quite interesting.
As an aside, the fact that younger people are willing to pay seems to me to confirm that there is the possibility to reach a new audience, probably younger than the usual reader.

This research doesn’t tell anything about pricing, although a few info may be inferred from various sources. For the Italian speaking reader, I’d like to point to Baionette librarie, whose latest posts recently summed up with convincing details that 9.99$ is already perceived as the price over which the consumer would think twice before paying (Il duca’s argument is far more complex than this, and he openly suggests a lower price, but for this post we can keep 9.99$ as the rough limit). Similar conclusions are reached by Antonio Tombolini in the post I also published here on Inchiostro Elettrico.

Anyway, what’s important is that people pay, and would pay, for content – and especially they pay for access to content (look at this article by James McQuivey, and think about the last paragraph…). It’s essential to understand how to give to the consumer a reason valuable enough to pay for content and the access to it because, as Nielsen’s research clearly states, “over time [consumers] will decide for themselves the value of content online”.
Once again, it’s the value to the consumer the most important asset, because the quality of the content is the key driver to a purchase, and the perceived quality must be high in order to convince a consumer to buy something. Not only, a free content is not necessarily perceived as worse than one for which there’s a price to pay.
Now, think about the quality of a typical e-book right now, and about the attempts by the industry to set a price based on the hardcover price and (in a… uhm… not really convincing way) production costs. Something must be wrong, you decide where.

On a similar topic: even if apparently it has nothing to do with books, it is interesting to see that “Should the majority of news sources put most, if not all, of their online content behind pay walls, 79% of the respondents say they would no longer go to their websites, taking it for granted they can find the same information elsewhere at no cost”.  This behavior reminds that “if the news is that important, it will find me” (source: New York Times)

Sidenote: the NYT article, but also this single piece of information from Nielsen's research, stresses the importance reached by digital word of mouth, and the way in which it works. It is true that this is valid especially for the younger generations, more keen to use social media - but they are also the ones more likely to spend money online for content. Food for thought.
Or, better still, thought for food.

The most interesting part is the general consensus among all age groups, throughout the world, that if one buys something online, he should have the right to copy it and share it with others. It’s a no-brainer, apparently, as more than 60% of the people, everywhere, answer in this manner.
This is, implicitly, a big NO WAY! to DRM. Hardly surprising, as DRM systems – especially cumbersome DRM systems that limits the possibilities of the consumer – have been rejected everywhere.

So: no DRM, quality content, low price – and a potential younger audience willing to pay.
Connecting these factors in the best possible way will be the key to success.

Creating communities

Just a few lines about a nice post by Marian Schembari on the DBW web site that sums up a few crucial points on the way a publisher may build their own communities. I like in particular this passage:

Since they’ve engaged their community as equals and not marketers, Tor has a foundation in place that enables them to engage fans long before a book’s publication date. This is good for both Tor and for sci-fi/fantasy authors from any publisher, a feat Defendini described as “gratifying”. He also pointed out that the complete lack of “us vs. them” mentality adds to the conversation.

“Publishers need to stop looking at other publishers as competition.” Amen!

I recall when a few years ago I was talking with a publisher about a possible redesign of their website, and (long story short) when I proposed him to link to other sources and external sites he looked at me puzzled and said: “Why should I? I want readers to stay on my site!”.

No, actually not. Not necessarily, at least.
You want readers to recognise you, you want to engage them and you want to create a bond with them.

Tidbits – Reader’s entitlement

Seriously, is it ever a good idea to disparage your customers? To treat them like they are annoyances? To suggest that they simply don’t understand how things work, when, really, why should they? Especially when, in at least one instance, the publishers were the ones who changed (or attempted to change) the rules?

So, as a person who happily pays for books, this is what I feel entitled to: the book in the format I prefer at the time my awareness in said book is sufficient that I go to make the purchase at the price I deem reasonable based on my extensive experience as a book consumer.

The truth is, I don’t care about ebook windowing (except that it’s, as far as I know, a relatively new idea, and to take readers to task for expecting simultaneous releases is a bit much, no?). I don’t care about ebook pricing games. I don’t even care how long it took the author to write the book, the amount of research that went into it, and that it was handwritten in blue ink on yellow paper. None of these things are indicators of whether or not I’m going to have an awesome reading experience.

Kassia Krozser, My sense of entitlement (in fact, it should be quoted in its entirety)

The e-books war: Antonio Tombolini’s point of view

Antonio Tombolini is the owner of Simplicissimus Book Farm, and he is with any probability the most authoritative advocate of the digital shift in trade publishing in Italy, as his firm started distributing e-book readers years ago, when e-books seemed – and actually were – a distant vision. He published last week on his blog a post on the Amazon/MacMillan/Apple issue, and I asked his permission to translate it for Inchiostro Elettrico.

So… I apologise for the rough translation, and thank him for his kindness:

Apple, Amazon, MacMillan and the e-books war. But… isn’t someone missing?

by Antonio Tombolini

Poor Publisher, MacMillan, that plays as David, succeeds in imposing Amazon, that plays as Goliath, his victory after two years of ruthless oppression by the latter, in the name of the Good Guys, that is those who do not want to kill books, and just want – oh, yes they do - the greater good of the authors and of beaux arts. And the strength to David-MacMillan comes from Apple, the Good Samaritan.

But what exactly was the oppression that Goliath-Amazon forced on David-MacMillan? Thanks to his uncontrolled power, Goliath-Amazon imposed to the ebooks of Poor Publisher sold in the Kindle Store the prices Amazon decided, depriving Poor Publisher of any control on the prices of his own products, and putting at risk – indirectly – author’s revenues. It’s the wholesale model, where the retailer (Amazon) asks the producer (MacMillan) the net price for the goods he wants to buy, and then it’s the retailer that decides the price to which he will sell the product to the consumer.

After two years of such a ruthless oppression, enter Good Samaritan-Apple, and he suggests publishers, with his iBooks, a different model, the so-called agency model: the retailer (Apple’s iBooks) doesn’t buy any goods, but acts as a sales agent on part of the producer (MacMillan), and is repaid with a commission. It’s now the producer/publisher that decides the final price to the consumer, and the agent/iBooks only asks for a commission.

So what’s the victory of David-MacMillan? Well – thanks to Good Samaritan-Apple that tells no way, with me and my iBooks it’s you that decide the price of your ebooks! – he is able to rebel against Goliath-Amazon and manages to win in the end: from now on Poor Publisher will sell his ebooks at the price he prefers. And that is true also in the Kindle Store of Goliath, that has to concede defeat.

Ok. But what’s the reality of things?

Who really is MacMillan? Certainly not a Poor Publisher: on the contrary, it’s one of the big six.

Thanks to MacMillan’s victory, their ebooks will be sold in the Kindle Store at 14.99$ instead than 9.99$: a weird kind of healthy competition, the one desired by MacMillan’s CEO, a competition that wants prices to go 50% up for the consumer!

In this whole story it’s bizarre that the world of the Good Guys (MacMillan and Apple) totally forgets that there is a player in the market that they may want to consider: the consumer, the one that spends the money that make firms survive. It’s bizarre that MacMillan, that any publisher actually, does not understand that the one that is making the rules, in the end, is the one that measures the added value, and that in the end it will be the consumer to impose his price to ebooks: and everybody knows – unless one wants to trick himself – that the 9.99$ threshold is already too high for who’s buying ebooks, and is accepted only now, given the rudimentary phase of the market. But soon, let’s say in three years’ time, an ebook will not cost more than 5$ (or 5€): and if there’s a way to earn an income (and there is, there definitely is!) it’s a matter that authors, publishers and booksellers will have to solve on their own.

What would a similar choice to MacMillan’s one from all of the big publishers bring? What will happen if they are to raise ebooks prices to 12/15$?

An accelerated extinction. Authors will realise that in this way they will earn less, for the simple reason that less (legal) ebooks will be sold. And they will shift to the opportunities of self-publishing (first among them the one of, surprise, Amazon), selling at a lower cost their ebooks but getting 70% of the incomes. As some Paulo Coelho did, for example.

So, what should publishers do?

Lots of things: anticipate the requests and expectations of the market, that is pricing ebooks less than 5$/€, offering them now, without being forced by the market, starting now the reorganisation of their production costs.

Realising that in the ebooks’ world (as the majors of the music world are showing) the reduction in production costs is more than proportional to the reduction in the incomes, that anyway will come.
And this means that in the ebooks’ world the publisher (and the author) may earn more than what is earned now: but in order to do so he must focus on his job as a publisher in this new world starting from now, he must focus on the added value that he may give compared to self-publishing.

To sum up, I mostly agree with this:


I asked Antonio the permission to publish his post because he underlines in a convincing way that, as I mentioned before, the reader is your master and that publishers have to focus on the added value they can give to ebooks.

It is true that people pay more – and will probably continue to pay more – than 9.99$/€ (and sometimes even more than 14.99$/€) every day, but that will hardly be the rule. In the end the market will push prices down, as already happened in other industries.
Not only: it seems that publishers keep reasoning only about production costs. This can be understood, also because mammoth firms that have to change their workflow must spend a whole lot of money right now. Nevertheless, they seem not to think enough on the value perceived by the reader. They seem to think that the reader will simply adapt to the prices.

An underlying reason is certainly the fact that they do not want for low ebooks prices to harm the paper books prices and they want to keep them competitive. It is also true, as for example Mike Shatzkin tells, quoting Michael Cader on Publisher’s Lunch (subscription only, sorry), that publishers are in fact lowering their margins with the agency model, and are ready to lower their prices in a not-too-distant future (I’ll try to tackle all these aspects in future posts).

But now the question actually is, at least for some of them, why not doing it now, why not boldly go where no publisher has gone before and try to build for themselves a different image?

Most of the business lies in the quality of the titles, but the quality itself is not only the story or style or depth of research of the book: it’s also the reader experience, and it’s also the brand. Why not build for themselves an “innovator” brand in the e-books business? There seems to be a crack open to reach a new audience that could be missed if publishers will stick too much to the standard business model, that is not efficient in the new market. Moreover, lowering the prices to the consumer and building a new image may have the nice side-effect of pushing not only ebooks sales but also the sales of traditional books, as it happened in the past and is happening right now (think Coelho, think Doctorow, or think Wu Ming in Italy).

A wild thought: waiting too much in lowering the prices will also open a wide space for smaller publishers but especially for independent editors / publishing communities (Cursor, anyone?) that could take advantage of the agency model and its sibling proposed by Amazon for lower priced e-books.

As Antonio says:

in the ebooks’ world the publisher (and the author) may earn more than what is earned now: but in order to do so he must focus on his job as a publisher in this new world starting from now, he must focus on the added value that he may give compared to self-publishing.

If he won’t do so, somebody else will step in.

Tidbits – Writers and readers

I’m really excited to start seeing people take a glass-half-full approach to what’s going on. I’m looking forward to people saying the risk of not changing is now greater than the risk of changing. I recognize the very large companies are not going to be able to blow themselves up and start over again, but I would like to see the smaller companies really grab the bull by the horns and start to reinvent themselves. It’s obviously hard for a 1,000-person organization to reinvent itself, but a five-person organization should be able to reinvent itself, because ultimately you don’t have to change that much.

It’s still about the writers and readers. And if you remember it’s about the writers and readers, then the changes you have to do, as the people in between, aren’t nearly as great as it sometimes looks.

Richard Nash, What does publishing 2.0 looks like? Richard Nash knows

Tidbits – Changing paradigms

There are better ways than advertising for demand and supply to find each other (including search, which is free), and more will be found. Google will be in the middle of that discovery process, no doubt. But it’s an open question whether Google will make the same kind of money in a post-advertising marketplace. I’m betting they won’t.

EOF – The Google Exposure, Doc Searls