I wonder how long Google will keep plugging away at Google Ebooks, I suspect they are in for the long haul. After all, their Google Books product is bound to provide a competitive advantage at SOME point!

Google is accelerating its push into the e-book space by acquiring online publishing company eBook Technologies in a move aimed at improving the reading experience on devices such as tablets and e-book readers. The acquisition comes just weeks after Google launched its own e-book store, called Google eBooks, and highlights the firm’s efforts to gain a foothold in the digital books business. The e-book market, which is valued at close to USD1bn and tipped to grow dramatically in coming years, is currently dominated by Amazon.

via Google buys online publishing firm eBook Technologies :: StrategyEye – Industry Intelligence.

photo credit: alancleaver_2000

About This Series
Things Publishers Fear is an occasional series about the realities of publishing in the modern era. For the record, survival is not guaranteed, nor is it always deserved.

Authors

I wrote the bulk of this article across on my personal blog, but it warrants a full exploration here on Green Lamp Media. You might wonder why publishers could fear authors, the life blood of their business? Let me explain the reasons.

Currently the bulk of authors are in a fairly powerless position relative to publishers. Publishers have money, access and publishing slots. Publishers finance the editorial and production work that goes into a book and have the relationships that ensure distribution, advertising and shelf space. This has been changing rapidly over the last few years.

One way it has been changing is self-inflicted, publishers shedding costs by shedding editors (and, some would argue, quality as they do it). But the other more visible way it is changing is in economic terms as the cost of making a text widely available drops very close to zero via effective digital publishing.

[pullquote]Why should you sell a paper publisher your digital rights when there is no need?[/pullquote]

In 2006 when I was only starting to think clearly about digital change (and had only been writing a blog for some 4 months) I wrote a post called Authors Will Drive Change, it was part of a short series of articles on what was changing the publishing industry.

The point is that publishing is no longer just about books and even more it is no longer about waiting for a publisher to decide your work is good enough for print. Options abound and as more and more writers realise that they will take advantage of it.

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

What I didn’t address back then and what has become clearer now, is how established authors will also drive change and in doing so, make a much bigger impact. After all, if ebooks begin to account for 20-30% of the market (or more) and of that major authors generate the lions share of sales then their departure from your lists will make a huge dent in revenues.

But even authors with moderate (still impressive but not BLOCKBUSTER) sales can see the benefit of direct sales and cutting the publisher out. The most recent example of this is JA Konrath who writes The Newbies Guide To Publishing blog. He has been posting for some time now about his rather impressive success in selling books via Amazon’s Kindle device:

In short, this market is perfect for a one-person operation.

I’d certainly entertain an offer from a large publisher, if they wanted to buy rights for one of my books. But I’m not going to go out looking for the opportunity. Especially since I’ll make more money in the long run if I keep my rights.

I could even make more money in the short run.

According to my recent royalty statement, my horror novel AFRAID sold about 54,000 copies in all formats, earning me around $27k.

If I released a Jack Kilborn ebook on my own, and it sold like my current ebooks are selling, I’d make $20k in a year.

It’s doubtful I’ll make $17K next year on AFRAID, since it’s no longer getting coop on bookstore shelves. But I’m sure I’d make $20k, or more, on a self-pubbed ebook.

So in two years I can make more money on my own on a self-pubbed ebook than a book released by a major publisher in hardcover, trade paper, paperback, and ebook formats, supported by a tour and advertising.

Unless it’s a big offer, I can’t imagine selling rights to my work ever again…

And There Is More
The IDPF released the figures for February ebook sales. They are pretty stunning. I’ve written elsewhere about my skepticism regarding ebooks and the industry’s obsession with price and a single format, but when one sees figures like this, it is almost understandable that they get excited and distracted by them.

Mike Shatzkin writes about what this seemingly rapid shift towards digital means for the print side of the business and it is an interesting perspective:

If by the end of 2012, 25% of sales for a new book are digital, then about half of new book sales will be made through online purchases if we count the print book sales made through online retailers (mostly Amazon.)

Online print sales can be served through inventory generated on demand. So, if these estimates are right, we are less than three years away from a publisher (or author) being able to reach half the market for a book without inventory risk!

Having half the market reachable without print-run risk or inventory storage; having half the customers connecting with their reading through online paths that make them at least theoretically identifiable; and having a quarter of those customers reading through a medium that enables interactivity will make all the changes we’ve seen so far in trade publishing appear trivial. And if the very perspicacious Carolyn Reidy, her unnamed counterpart, and I are right, that disruption is going to take place before many books now under contract reach their publication date.

Personally I caution about moving from current trends towards future results. I’m unsure if the sales will continue at their current level never mind continue to explode in such an impressive fashion. However, even if we allow that Mike and the trends are half right and we see say 33% or 40% of the market reachable via no-risk required methods by 2012, then the savvy authors like JA Konrath will see little reason to work with a publisher at all. Why, if they don’t require the finance that is one of a publishers strongest assets, would they?
[pullquote]as the market becomes more digitally biased, the greater the risk that lead and mid-list authors see first the advantage of retaining their own digital rights[/pullquote]
This is not to say that publishers don’t offer more than finance, they do and in abundance, but for some authors, the skill set that publishers offer is affordable and at a more reasonable cut than they currently allow publishers to keep.

In my view, as the market becomes more digitally biased, the greater the risk that lead and mid-list authors see first the advantage of retaining their own digital rights, then later the advantage of retaining all rights and exploiting them for themselves.

The future, for all that it offers great promise to authors and thus they WILL drive change, may not offer such great promise for publishers and certainly not as they currently exist and hence why publishers fear Authors!

photo credit: TheTruthAbout…

About This Series
Things Publishers Fear is an occasional series about the realities of publishing in the modern era. For the record, survival is not guaranteed, nor is it always deserved.

Price

Information Wants To Be Free!

Freemium Model!

$9.99

Agency Model

Right now it seems the whole publishing industry is obsessed with price. The FT carried a piece on Tuesday about how Random House “Fear An iPad Price War“. Macmillan CEO John Sargent has been blogging about it, there is even a FREEMIUM SUMMIT in San Francisco on Friday (Contrary to what you’d expect tickets cost $449.00 rather than $0.00).

And who can blame them. Price is already creating enormous problems for publishers. And it’s not just things like Kindle users punishing authors with non-existent, delayed or expensive Kindle editions by giving them one star reviews (here and here for good discussion).

Price is a problem in the real world as well as the digital one. You only need to look to last winter’s price war in the US to see that. Amazon and Walmart kicked each other (and publishers) in the head to prove they had the best price for some key hardcover titles. The price point flavour of the day was $9.99. Then Target joined the fray.

The problem of course is that these price wars and ebook protests are driving a value perception home in consumers minds. On the one hand it reinforces the idea of ebooks being “worth” less than physical books and on the other, the price of physical books is too high, why else would retailers be selling them at such large discounts.

Bizarrely enough, until the enforced change to an agency model (which is by the by not across the board and is unlikely to become the standard if Amazon has its way), Amazon was selling ebooks at a loss, at least on new releases. And all three companies (Amazon, Target and Walmart) were selling their hardcovers at loss prices.

Free Will Increase Sales
And then there is the giving away stuff will help you sell more stuff argument. There are studies which seem to suggest that there are benefits. But the key point about those studies, is that they are by their nature, short-termist. This is not a criticism, just a reality.

As the aforementioned John Sargent noted about the longer term of “Free” (HT to Mike Cane for pulling this quote):

We had a car guide, Edmund’s Car Guide. That was a distributed line we had at one point.

Edmund’s decided to put a little content up on the web. We said, “Great, it’ll drive the sales.”

He said, “I’m gonna put it all up.” We said, “Don’t do it. You won’t sell books.” He said, “I’m gonna prove you wrong.” He put one-hundred per cent of his content up for free.

First year, sales of the book went up.

Second year, they went up again.

Third year, they dropped by fifty per cent.

Fourth year, we didn’t sell another book. You don’t find them on a bookstore shelf anymore.

So there is that danger of the experimental stage of, “I give it away free and look! — my sales go up.”

There’s gonna come a point in time where I give it away for free and my sales don’t go up and then there’s gonna be a point in time when I give it away for free and I ain’t selling shit anymore.

Pushing For More
From the perspective of a book publisher, price is about the only lever one has to drive revenue. Getting more for the books you sell is going to increase your top and bottom lines results. That is if you can control costs. So it seems like great territory for a fight, it seems like a great place to drag a bigger percentage from the other guys side of the maths to your side.

Apple provided the opportunity to beat Amazon with a stick and to actually enable that clawback. Publishers, by some thinking, would have been fools not to take it.

Besieged
There are many potential retorts to this post, so many “but what about x, or y, or z” but the logic of fighting on price, of resisting free, of pushing for a higher value on content seems inescapable to most publishers who have for so long been on the losing edge of the price war.

As some of the posts in this series have explored (Apple, Google, Amazon) as an industry the ground on which Publishing is built is being undermined.

The smartest heads in the building are seeing that the future is not necessarily rosy, that survival is not guaranteed. That places an awesome responsibility on the heads of managers and executives. No one wants to be the man or the woman who brought X Company down. That leads to defensive thinking.

That is why Publishers Fear Price and when you look at it from their perspective, they are right to.

photo credit: Max Braun

About This Series
Things Publishers Fear is an occasional series about the realities of publishing in the modern era. For the record, survival is not guaranteed, nor is it always deserved.

Google

Where to start with the fear of Google. The 12 million scanned books. Yes that will do for now!

It is not just that publishers are rightly pissed at the fact of Google’s actions (and the gall they have shown in continuing with them throughout the process of first suing and then reaching a complex and variously hated/despised/grudgingly accepted settlement) they fear the implications of Google’s actions.

Fearing the fact

When I say the fact I mean that Google has, at the very least, stretched the idea of fair use to the limit and in doing so created a tool of great value. A searchable database of all the works they can. Nothing will now put the genie BACK in the bottle. The database exists the power of publishers as possessors of that POTENTIAL database is gone, broken forever by the reality of Google Books. Search there and you’ll see its amazing capacities even if only partly, and in a hampered way, realised.

You may not think that this is important but it has created a database that publishers do not:

a) control
b) understand and
c) know how to profit from

If publishers had been involved in the creation of such a database they might have built in any number of changes, made any number of demands and would in any case have had different interests from each other, so much so that they probably would never have made this a reality (and why should they if does not benefit them?). But now they are presented with a fait accompli and one that, even with a settlement, leaves them disadvantaged and with a database that hardly favours them.

Maybe these things are their just deserts, perhaps you feel they have created this situation by failing to move with the times and invest in technology and rights databases, but this series is designed to take the publishers viewpoint and from that perspective, those three things are very worrisome indeed and justify some fear, regardless of the historical reasons for their existence.

Fearing the potential

Any sensible publisher, though, reserves their real fear for the potential of Google and its database. Google are very well placed to benefit from every digital trend you can envisage. The massive textual database they have built compliments this in innumerable ways. Mobile results can be enriched with tourist info from books, history texts and restaurant reviews, not to mention news stories from newspaper and magazine publishers (as if any content producer will escape). What is more so much of the database will contain books that singly have little of value but as a whole collection and cross-referenced are worth considerable sums (public domain works, government publications and the like).

The database brings the reality of competition with EVERY SINGLE BOOK EVER PUBLISHED into sharp focus for publishers as new books face increased real challenges from books published 10, 20, 300 years ago and in every conceivable context, on a phone, laptop, desk computer, iPad, iPod, wi-fi enable device, anything that connects to the cloud and has a screen (not to mention an increase in POD). So if the web enabled a flood of amateur (and let’s face it not always terribly good) content, Google’s books database enables a flood of real professional content that rings true with quality and which at a time when being published was harder than it is now has the stamp of publishers approval. This onslaught threatens directly the lifeblood of all publishing, the new book trade, in ways that all publishers rightly fear.

The potential of Google Books is that by supplying information from a vast accessible anywhere database you reduce the overall demand for new or fresh paid content. What’s even more frightening is that Google is a private company and access to that enormous database will be, for all intents and purposes, at their whim.

How do you like them apples? Well, as a publisher, I don’t like them much, but as William James said: “acceptance of what has happened is the first step to overcoming the consequences of any misfortune.”

About This Series
Things Publishers Fear is an occasional series about the realities of publishing in the modern era. For the record, survival is not guaranteed, nor is it always deserved.

photo credit: dsearls

No 1 ~ AMAZON

Despite the seeming victory of Macmillan in its battle to force Amazon to accept the new “agency model” publishers have a sensible fear of Amazon. Like all businesses that sell their goods to consumers through intermediaries, publishers are forced to subject themselves and their products to the requests and “suggestions” of the retailer.

Amazon controls a large portion of the online consumer connection to books. They may not be the best at this, but they are surely the biggest. They have been on top of pretty much every trend in publishing for some time:

They have exceptional efficiencies in terms of distribution and sales (both in terms of ebooks and print books), the kind of efficiencies that publishers could never equal. Operations, operations, operations. If you can ship faster and cheaper you have an advantage over your rivals. What publisher could afford to build out a Whispernet for ebook delivery?

They are organised by category and could easily spin out niche based sales sites (and could afford to pay for content to go with that and attract attention) if they chose. If this doesn’t concern you ask yourself if Tor.com is viable if Amazon spins out a sales site with masses of author or for hire content built around the Sci-fi & Fantasy genres?

They have a powerful presence in Print on Demand and Self Publishing. You think that’s not that amazing witness the small scale gold rush that has been emerging over the last six months as established publishers see future profit and less authorial and consumer concern in Self Publishing. Mick Rooney has an interesting Guest column addressing some of these points over at Irish Publishing News.

With the launch in 2009 of Amazon Encore, Amazon is officially and finally a publisher. That Encore is currently modest hardly matters, they could easily scale that effort very rapidly if they chose and because it need not support the massive legacy costs that the bigger publishers need to, they require much more modest sales results per title and much less working capital per title. Oh and in 2010 they have already announced 9 titles all of which will be out by April 2010. I expect to see many more before the year is out.

So while a victory on the ebook pricing model seems like a step forward for publishers in may ways it represents a funny one. The “Agency Model” actually means Amazon will now profit from each sale whereas up until now, for new releases, it was losing money. So Amazon stands to make more money per unit of a new release sold, but less for backlist titles and non-new releases. But it moves the goal posts by removing the key selling point for the Kindle, the $9.99 new release price point.

This makes it much less attractive for Amazon to deal with publishers rather than cutting them out of the equation and dealing directly with authors or even with agents. After all, they were using ebooks to sell high priced devices and even if they make more money per ebook sold it won’t compensate them for selling fewer units of the Kindle. The battle for publishers now is to retain control of that crucial relationship, the author-publisher relationship. Having already surrendered the publisher-reader relationship and knowing how difficult it will be to regain traction in that arena, to allow Amazon to insert itself between the author and the publisher would be fatal.

So, from their perspective, publishers’ fears of amazon are rational and justified. Amazon threatens to disintermediate the publishing industry using the talent the industry has nurtured and the content the industry has edited, developed, marketed and grown. That hardly seems fair does it? But then “Deserve got nuthin’ to do with it.” – Snoop

“It doesn’t matter how good or bad the product is, the fact is that people don’t read anymore,” he said. “Forty percent of the people in the U.S. read one book or less last year. The whole conception is flawed at the top because people don’t read anymore.” Steve Jobs in interview with David Pogue & John Markoff of the New York Times

Maybe it’s the slew of prediction posts and the ease with which one can now review them over at George’s blog, but whatever the cause, I have been thinking about publishing, what it is, why we do it and how it has changed and how it will change over the next decade or so. Mostly that is because I plan to stay in the industry and function as a publisher, but also because I’d like to have a sense of where we are headed so I can help authors and publishers adapt to the flow of change.

The Platform
If I was to put the question in context for people I would quote the following from Paul Saffo (who is, by any analysis, a genius):

Rule: Change is never linear. Our expectations are linear, but new technologies come in “S” curves, so we routinely overestimate short-term change and underestimate long-term change. “Never mistake a clear view for a short distance.” From the Long Now Seminar: “Embracing Uncertainty: the secret to effective forecasting”

Why do I quote that piece? Because people have become so used to the power of the internet and the world wide web that they tend to see it as an innovation whose impact has happened and is already understood. I think most people are wrong. The Internet IS the platform and we are still struggling to accommodate the long term implications of that.

With the proviso that access is neither free (though it is cheap as in beer) nor, for many in the world, easy (but getting easier as mobile internet spreads with mobile technology an associated and fascinating technology), the internet has made publishers out of everyone on the planet.

The means of publication and distribution have been opened up to many, many millions. Digital printing has been slowly but surely reducing the barriers to print publishing and the impact of that has been felt mostly at the bottom of the publishing ladder as self publishers flourish and wither, succeed and fail not always because of merit or flaws but with impressive determination and in large numbers. But digital PUBLISHING, using the Internet as the platform, this is quite a revolutionary thing.

It is my view that all the efforts by various parties to create ebook readers that part the reader from their hard earned cash and set up some variant of the iPod/iTunes power punch for books, are hopelessly misplaced.

Why re-create the wheel? The challange is not to invent the future (it’s here) the challenge is to make it pay and as to that, I spotted a great description of where we are over on David Worlock’s blog (another very smart man, who I have seen speak previously but never realised he has a blog) last week and I think it offers a clear vision:

We are working within a new continuum, every technology we will use in the next 15 years has already been invented and patented, and what remains to be seen is only the way in which consumers react to which combinations of hardware/software/content to solve which problems in what contexts. And nothing is lost by experimentation.

What This Means For Us?
This reality though has several disconcerting elements:

1) Value is flowing out of traditional print cash-cows as the economics of those markets change. This is especially clear to newspaper publishers, magazine publishers and to hardback imprints. I suspect that paperback imprints will begin to feel the pressure from the web much more keenly in 2010-2011. This will happen as more heavy book buyers begin to engage with web reading driven as they will be by more mobile access (especially when Google Editions launches) and better, more compelling offers from technology companies and publishers.

2) Total value is spreading across a lot more players. In some cases this is driving revenue per unit towards zero as competition drives down the value of each individual piece of information or content. As players with little hope of getting paid anyway charge little or nothing for their content, the overall value of the market is reduced.

3) The emerging supply chain structure does not favour content oriented companies who do not have scale and efficient ways of delivering that content cost-effectively or a specialist niche that makes their content more valuable. If you are not one of the newly emerging content power houses like Demand Media (Some thoughts on demand: Poynter – ReadWriteWeb – Wired) unless you don’t charge the economic cost of your content, in which case you are lifestyle business, or your content has another purpose than making you money directly. On the other hand, there is no new normal and the supply chain will surely be a web rather than a chain, with room for all kinds of innovative structures.

4) As the volume of content explodes, the average quality drops. This seems to me incontestable, if only because many people are not good writers and many more are only mediocre at best. I do not exclude myself from these groups. This will provide opportunity.

5) Most people will not make money from content.

Do I Have Any Predictions?
A few but they are not confined to 2010:

1) Ultimately ebooks and ereaders will fail in favour of access to content paid or free over the internet, perhaps through apps on multi-use devices. That content will be text, graphics, video, audio, games and maybe new formats I’ve never even thought of it, won’t really matter, what will matter is what the customer wants to spend their attention (and possibly money) on.

2) At some point, ISPs will be forced to share more of the money they are making in the back of all this content with the content producers, just like they have been forced to by ESPN (Wired story). It amazes me that they have escaped this for so long.

3) Quality and curation will deliver rewards (so firing editors may be self-defeating) in the long-term, if you survive the shakeout. Given the proliferation of poorly written/created content, acknowledged quality will be a valuable feature as will good filtering capabilities (as we can already see).

4) Survival is by no means certain for publishers, because the system does not EXPLICITLY need us to operate, we need to create a new ecosphere or at the very least a new reason for existing. I don’t think this is impossible. For an interesting analysis of how supply chains change and adapt read this article by Paul Saffo.

5) Big authors and small authors will become vibrant self-publishers in digital and print, the middle ranks of writers will suffer frustration and pain as they exceed small ambitions only to have their larger dreams dashed on the mountain of content and the inability to scale it (I say writers but I believe this will be true of everyone who creates content of any type).

This may seem gloomy, and perhaps it is, but facing the facts of the digital revolution in the face put you in a better position to think strategically about how to react and how to change. Failure to change has only one outcome and I don’t believe that extinction would be to my liking.

When you seek on the Internet, you generally shall find!

Not having an RSS feature on the page was a bit too much for me to handle I think, especially as I have raised an eyebrow to those without it in the past, It’s not that it will put someone off reading the first time, but it does reduce the likelihood of return visits.

So, with the help of Page2Rss.com the you can now get the RSS Feed for Irish Publishing News here.

Of course this is a far from perfect solution and it’s slow, but it sure improves the access.

Let me know how it feels,
Eoin

1) An RSS feed for the page (this will be resolved when I move to a stand alone platform)
2) An archive
3) Proper seach capacities
4) Some kind of submission tool for readers to send in links

Anyone know a better plugin that does those things?

Eoin

I very much enjoyed the Digital Development’s seminar in Tallaght Library on 28 November. It was quite a daunting prospect for me as I had never spoken on my own for that long before, but people were very nice!

The panel discussion was great and I met some fascinating people during the breaks. Thanks to all the panelist who really brought commitment and great perspective to the discussion.

The great people at Children’s Books Ireland have now put the transcript and audio podcasts of the entire event.

I don’t like the sound of my own voice (at least not when hearing a recording of it!) but there is a lot in the discussion to ponder. Like this:

The main thing about this digital change and the thing we have to remember is that this is just part of a much bigger shift in society as a whole. And that is a shift that is engendered by cheaper technology. The technology, the cost of technology is dropping at a rapid rate.

And, not to blow my own trumpet:

I think ebooks is too restrictive a term. I think words, as opposed to synonym, because we are not in that game, words read on a screen is growing and will continue to grow. Whether that screen is these yolks (iphones) or those yolks (computers) is pretty immaterial at this point; it will be both.

With thanks to Flickr user adafruit used under CC Attribution-Non-Commercial-Share Alike 2.0 Generic Licence

I’m (through Green Lamp Media) working with the wonderful people at Children’s Books Ireland to make a Digital Developments Seminar happen in Tallaght Library on 28 November 2009. I’m really rather looking forward to it:

Digital Developments will focus on where digital changes have taken publishing so far and what further changes can be expected in the future. The seminar will also offer practical tools and strategies to authors, booksellers, and publishers alike, on how to take the next step into the world of digital and social media.

The half-day event will feature a keynote address from me and a panel discussion featuring Ivan O’Brien, Susan Carleton and Vanessa Robertson. It is going to be wonderful.

For more information visit the event page over at CBI.

I’m hoping that it will be practical, useful and focused on the real application of technology for authors, publishers and booksellers.
Eoin