December, 2009

A baker’s dozen predictions for 2010

It is customary for those of us who do crystal-ball gazing to make some calls about the year ahead at around the time the celebrants head for Times Square. I am not a man to flout custom. Here are some of the things I expect we’ll see in 2010.

1. At least one major book will have several different enhanced ebook editions. This will result from a combination of circumstances: the different capabilities of ebook hardware and reader platforms, the desire of publishers and authors to justify print-like prices for ebooks, the sheer ability of authors and their fans to do new things electronically, and the dawning awareness that there are at least two distinctly different ebook markets: one just wants to read the print book on an electronic screen and the other wants links and videos and other enhancements that really change the print book experience. (Corrolary prediction: the idea of an enhanced ebook that is only sold “temporarily” in the first window when the book comes out, which has been floated by at least one publisher, will be short-lived. Whatever is made for sale in electronic form will remain available approximately forever. Or, put another way, if you have a product that requires no inventory investment that has a market, you’ll keep satisfying it.)

2. Here come some new retail book outlets, but can publishers afford the risk of selling to them? The growing incidence of bookstore-less cities will provoke the mass merchants to explore a greatly increased title selection inside their stores as a magnet to attract disenfranchised bookstore customers. The early emphasis will be on children’s books and illustrated how-to: books for which there is high value to seeing them before buying them. They might even see this expansion as a margin-booster because if they’re responding to scarcity (as they would be), then discounting might not be as necessary as it is with their bestseller-only strategy now. Publishers will be wary of this new initiative, knowing that it could fail and lead to large returns but it will be on the drawing boards by the end of 2010.

3. Thanks to digital, there is no minimum length for a book anymore. Ebooks that are too short to be print books will become a real factor in ebook sales, opening up new opportunities for publishers but even more for authors. Short fiction is already well established in the romance genre and some major publishers have broken out stories from anthologies as separate items to be sold on Kindle. In 2010, authors and agents will discover that shorter-than-a-book works can be the subject of useful experimentation and learning through electronic publishing and, by the end of the year, it will become a frequently-employed device. Periodical media (newspapers and magazines) will also see this paid delivery mechanism as an alternative worth experimentation for them as well. After all, if a big publisher can unbundle a short story anthology to sell the individual stories as Kindle editons, why couldn’t The New Yorker sell the short fiction it publishes that way as well? This concept has been tipped by the announcement in 2009 than the web site Daily Beast will be delivering shorter books in a timely manner through electronic distribution.

4. Ebooks will require a new industry directory (and it won’t be printed.) Driven by new entrants in the field, self-publishing, and unbundled aggregations of print books, the gap between the items listed in “Books in Print” and the items that should be listed in a directory of “Ebooks Available” will continue to grow. There has been a robust conversation in a corner of the book community about whether all ebook editions need ISBNs, but that’s really only one part of a much larger metadata problem. In 2010 we are likely to see at least one serious effort to deliver a new online directory for ebooks.

5. Big publishers start to match their offerings to their marketing capability. The rearrangement of the big publishers’ IP portfolios will begin in 2010 as they emphasize what they do best: deliver narrative-writing and children’s books to multiple outlets in large quantities. This reshuffle will only begin to be evident in 2010, but we will see small slices of big publishers’ lists sold or licensed to specialist small publishers and we will see the beginnings of genre consolidation among the big publishers, with some publishers beefing up and others exiting romance, science fiction, and mystery. In 2010 the latter will take the form of list growth or cutbacks, not the sale of whole lists to a competitor. We’ll see that in 2011 or 2012.

6. Ebooks become significant revenue contributors for many titles. By the end of 2010, ebook sales will routinely constitute at least 20% of the units moved for midlist and the lower tier of bestsellers and at least 10% of the units for really big bestsellers. (These are predictions for narrative writing; illustrated books and kids’ picture books will lag considerably.)

7. Circumstances will outrun the ebook “windowing” strategy. By the end of 2010, the experiment with “windowing” ebooks — withholding them from release when the hardcover comes out — will end as increasing evidence persuades publishers and agents that ebook sales (at any price) spur print book sales (at any price), not cannibalize or discourage them and, furthermore, that this withholding effort does nothing to restrain Amazon’s proclivity for discounting. (Amazon can’t quit with so many competitors joining them; see number 11 below.) There will also be steadily increasing evidence that most readers distinctly prefer either digital books or paper for their narrative reading and the real minority is the people who routinely read both.

8. In the digital world, geographical territories will be found not to make much sense. The problem of managing territorial rights for ebooks will be a growing problem the industry will have to deal with. As ebook platforms are increasingly separated from dedicated readers (a move even Amazon encourages with its Kindle software working on PCs and iPhones by the beginning of 2010 with more to come throughout the year), people all over the world express their frustration about books they are blocked from obtaining by obsolete rights regimes. With the number of ebook platforms and outlets increasing, it becomes almost impossible to police these rights effectively. Authors with global audiences become increasingly sensitive to the frustration of their fans and, through their agents, lobby for “open markets” for ebooks to solve the problem. US publishers back the idea and smaller market publishers hate it, but by the end of 2010 it is obvious that territorial rights will be relegated to print books only, meaning the end could be in sight for the entire concept of territoriality (but, because of old contracts and lots of national laws, it will be a very long sunset.) Pushing back against this concept might be publishers in countries with large English-language populations (Israel comes to mind, but I know publishers getting offers from Nigeria) who want to carve out a national monopoly for their own local editions in English. But that would be print-only.

9. Authors with clout start looking more like publishers. Some authors who have developed huge followings on Facebook and Twitter and their own blogs start to demonstrate that they can have a serious positive impact on the books of other authors they favor. This leads to a variation on the time-honored practice of getting blurbs and jacket quote-lines as savvy editors and agents suss who the new author-megaphones are and line up to get their support. The prediction for 2010 is that this will start to become obvious. The likely prediction for 2011 will be that this leads to authors becoming quasi-publishers or, perhaps, getting “imprint” deals from established houses to select and promote other people’s writing.

10. The “shakeout” in ebook delivery mechanisms won’t start this year; proliferation rules in 2010. With the arrival of Google Editions in the first or second quarter of 2010, there will be multiple channels to the ebook market through a variety of players: Google, Amazon, Apple, Baker & Taylor’s Blio, Kobo (formerly Shortcovers, the ebook operation begun by Indigo of Canada), and Sony will not be alone! During the course of 2010, the industry will become aware that there are three moving parts here: the device ebooks are viewed on, the ebook “reader” software the device employs, and the retailing and merchandising experience for the consumer shopping (or searching) for a particular book. As it becomes clear that ebook readers employ multiple devices and can accept a variety of platforms, the shopping experience will become appreciated as the most important determinant of consumer loyalty for most books. This is a moving target; everybody will be working on it. But as we enter 2010, it looks like Kobo has figured this out better (so far) than anybody else.

11. Retailers will demonstrate that they have more at stake with each file they sell than the revenue from that sale. Because there are so many players fighting for a foothold in ebooks, discounting them deeply will be the “new normal.” This will enable publishers to keep their “established” retail price (and their revenue per unit sold) high, but consumers will increasingly see ebooks as the less expensive alternative.

12. We will see greater integration of ebook offerings with other products and services. The merchandising challenge for ebooks will ultimately be met web page by web page over the entire Internet. This future paradigm will be tipped in 2010 when we start to see ebook stores on more and more non-book web sites, each trying to deliver some sort of value-add with curation or follow-on products.

13. Book publishers will have to admit to real confusion about what the product is that they produce. The big meme coming out of 2010 will be “what is a book?” Publishers will increasingly be releasing productions that contain video, audio, animation, slide shows, and interactive game elements. Movie, TV, and game producers will see an alternate marketing and revenue channel available through “ebookifying” content they have and moving it through book channels like a “tie-in.” Where one stops and the other begins will become increasingly difficult to see (and increasingly irrelevant).


Long ago at the Los Angeles Times Book Review

Although the decline of newspaper book review sections is just a sub-set of the larger sadness of the overall demise of newspapers, I was struck by the recent report of the mighty Los Angeles Times Book Review being stripped down to practically nothing.

I haven’t read it for years, but this news made me think about a time when book reviews in that paper were important to me.

Something over 40 years ago (wow!), I was an undergraduate at UCLA fortunate enough to take a bunch of courses from Robert Kirsch, who was then both the Book Review Editor of the LA Times and the daily book critic. Kirsch wrote six daily book reviews a week and edited the Sunday section. He also taught a course or two each quarter at UCLA, assigned more writing than any professor I ever had, and put more editing and commentary marks on the stuff we turned in than any other professor did too. He also clearly had plenty of time to have fun.

Obviously, there had to be a trick to it.

Kirsch explained to one of our classes that he had invented a speed-reading technique for himself in the early 1950s before he had ever encountered Evelyn Wood. The key, Bob said, was that you had to stop “silently reading aloud”, effectively articulating each word to yourself (as we all did, he said) as you processed it. He said if you put your hands to your throat you could feel yourself doing it. Avoiding that, he claimed, allowed you to pull in whole sentences and paragraphs at a time.

I just didn’t get it. It didn’t make any sense to me. I always read “word by word” and still do. But Kirsch read at a speed that I would call “scanning” (his eyes moved over the page) and he turned pages like a person who was looking for something that would stand out. (Let’s say you were looking for a series of capitalized words on a written page: “United States of America” or “American Civil Liberties Union” and think about how fast you could scan text and be sure you weren’t missing that.) But he remembered everything he’d read.

(Years after I left school, I met my wife who reads in these chunks the way Kirsch did. I always finished every reading test I ever took before time was up; Martha reads narative books about 2 or 3 times as fast as I do. She’s not as fast as Kirsch and she didn’t consciously “teach herself” the way he did, but she also does what I just can’t get: she reads in chunks, rather than word-by-word.)

Kirsch loved writing those daily book reviews and teaching the classes, but he hated the admin involved in being the book editor. So around the time I graduated from college, he took his best student from UCLA, Digby Diehl, and made him the Book Review Editor. (I am deliberately not checking this story with Digby — with whom I have a friendship that goes back to those days — prior to posting but I’m going to tell Digby about the post and invite to “revise and extend” my remarks as he sees fit as a comment.) Kirsch once, in a weak moment, said I was the best (or maybe he said “one of the best”; I didn’t have hearing aids yet back then but needed them) student he’d had, but I wasn’t old enough to be considered for the job. I wouldn’t have been as good at it as Digby was anyway.

The first course I took from Kirsch was on “Criticism” and the first assignment he gave us was to write “Your Critical Credo.” What are your rules for yourself when you write criticism of literature or movies or art? What are your standards? This was typical of Kirsch, assigning you something that forced you to think about how you think.

Another assignment that stands out in my memory was a movie review we did for his class. Bob arranged for us to see a movie screening of a Campus Christian Crusade film called “Up with People”. We saw the film in an evening screening and had to turn it our reviews at class the next day, just like real film critics!

A number of us stayed in touch with Bob Kirsch after our college years. I remember an assignment he had in London in the early 1970s and recall his pretty and youthful and blonde wife wearing a leather skirt she had bought on Carnaby Street in London (according to Bob.) We lost him far too young; he succumbed to pancreatic cancer in the late 1970s. Even the nature of his death, as it was told to me, bore his special stamp. When he got the diagnosis, he and his wife moved to a beach cottage in Santa Barbara where he lived out his few remaining weeks without treatment or any fanfare. He accepted reality. I think that was a hallmark of his intellect.

Of course, the realities of Kirsch’s time didn’t include disappearing newspapers and disappearing book review sections covering a disappearing trade book business. But I can only begin to imagine what he would have done with digital reading. Plenty, I’ll bet.


The big guys don’t see the fundamental problem

The rapid series of developments in the digital book space and my rising profile mean that I seem to be in an interview with a journalist just about every day. As I was yesterday. The focus of yesterday’s conversation was the Baker & Taylor“Blio” platform that I wrote about last week. How widespread did I think its uptake would be?

The interviewer and I covered a lot of ground, including ebook pricing and timing and whether publishers would be able to make enhanced ebooks work. Those are the topics of the moment (and they are all panel topics at Digital Book World.)

At one point we had a robust discussion about ebook pricing. My interviewer asked me about a pundit’s observation that hardcover books were just wildly overpriced. The implication is that publishers should consider themselves damn lucky that people would pay $9.99 for an ebook, which, after all, has far fewer bytes than a movie they can get for $1.99.

That’s an easy one to answer. What’s a “right” price? Well, from the publisher’s perspective, that’s a question with a clear mathematical answer. (The math wouldn’t yield the same answer for an author.) The right price is the one at which the total gross margin — revenues after all costs — is maximized. We all know more will buy if it is cheaper and fewer will buy if it is more expensive, but the “right” price is the one where customers times margin (margin being revenue minus costs) is the highest it can be.

There is no way in the world that a publisher would maximize margin cutting $28 print book prices to $9.99. So the author of this blogpost being quoted to me might be looking at the “right price” from a consumer perspective or a high-level industry observer perspective, but they sure aren’t looking at it from the perspective of the one who sets the price: the publisher.

At the conclusion of the interview, the journalist on the other end of the phone asked me whether, in effect, publishers would be able to save themselves. “Is there a model,” she said, “which assures that a publisher will profit selling their books in the future?”

Now, I must say before you read my answer, this expresses a long view, not an immediate one. But it sure isn’t comforting to people who sell content for a living.

Is there a model for success selling content? I think the answer to that question is “no.” I’ve spent my lifetime in book publishing and so did my Dad; I don’t like coming to this conclusion. But what I think I see is that selling content as a publisher is a business that is going to just get harder and harder until it won’t really be much of a business anymore.

This has nothing to do with piracy or DRM or Amazon’s promotional ebook pricing. It has to do with the most basic of economic laws: supply and demand.

Until the digital age, content was scarce. It wasn’t scarce because people didn’t create it; it was scarce because it required an investment to distribute it. That’s no longer true. Anybody with an Internet connection can make anything they write (or snap or video or sing) available to anybody else with an Internet connection. For just about free. That’s just one reason — among many — why the amount of content choices available to everybody has mushroomed in the past 15 years.

When the supply of something goes up faster than demand, the price of the something drops. Or, put another way, money flows to scarcity. And content is anything but scarce. That, in a nutshell, is the inexorable problem publishers face. And every day it gets worse. More backlist and out of print and public domain and orphan books get digitized and made available. More bloggers blog. More commercial operations put content online to satisfy their own stakeholders. More videos are uploaded to YouTube and more documents are uploaded to Scribd. All of it is processed and made discoverable by Google and other search engines. And the cumulative effect of all this content being created as something other than new publications for sale is cutting into the market for content that is being created with the expectation of sale.

What is the new scarce item that will attract the dollars if IP is so common that it becomes hard to sell? The answer is the attention of people: eyeballs. And the winning trick for publishers will be to use the content they control — which today does have value — as “bait” to attract the attention of people and then to keep that attention and build a business around it.

Note to some publishers who think they’re doing this: it is not the right answer to simply grab email names and web site registrations as a way to offer the same product catalog over and over again by email blasts. That doesn’t create value for a community and, before long, the community will lose interest and move on. You will lower your marketing costs temporarily with that strategy, but you’re still building a business of selling content and you’ll still, ultimately, deal with the problem that something roughly equivalent to much of what you want to sell will be available elsewhere for free.

I’m far enough ahead of the wave with this insight (if, indeed, time proves it to be an insight) that I can’t really point you to any examples yet from established publishers who followed Shatzkin’s formula to success (although I’m working on a couple that might be worthy of mention by a year from now.) So far, all that is clear is that publishers that stick to an audience fare better in the digital world than the ones who don’t. Their marketing costs are lower and their reach to the audience is both more effective and less dependent on intermediaries.

A stark illustration of this hit my radar screen last month.  A major agent told me that he sold a Mind, Body, Spirit author’s book to Random House, which sold 12,000 copies.  He sold the next book by the same author to niche publisher Hay House, which sold 200,000 copies! And Hay House, with over a million email addresses of people all interested in the same type of book, probably spent less on marketing to sell eight times as many.

There is one example that points the way for all of us in this business right under our noses every day. It is Publishers Marketplace, the creation of Michael Cader. He didn’t have book content to use as bait for the publishing community, so he created a free daily newsletter, Publishers Lunch about ten years ago. The formula he used — which was novel then and is now a commonplace — was to find the stories of interest to his community every morning and deliver the links to those stories, along with a little commentary, for free. That created an enormous number of sign-ups very quickly and a corresponding amount of grumbling from the established trade press, which would have a) never wanted to show anybody else’s story rather than their own and b) would have expected to sell any content they generated rather than giving it away as Cader did. After all, selling content was the model! (Sound familiar?)

I don’t think it took a year before Cader established his community, Publishers Marketplace, built from the eyeballs that were attracted by the free content in Lunch. Soon he made the “free Lunch” an abridged version, so the “full Lunch” became one of many benefits of “membership” in the community, which comes at a monthly subscription price for the unaffiliated and at site license prices for big companies. It is important to note that the full Lunch content alone wouldn’t keep and hold a community. Rather it is databases of information, many of them created by the contributions of the audience and additional tools and services (such as a free web page for every member) that keep people signing up and paying each month without dropping out.

Publishers have always focused primarily on the content. Survival in the future will require focusing on the market.

Publishers Marketplace and Hay House (and Harlequin and F+W and Interweave and Chelsea Green and all publishers who are dedicated to serving the same community over and over again) are on the right path, one that is very difficult for general publishers to tread. Taking steps to preserve the current marketplace for content — tinkering with DRM and fighting piracy; grappling with the timing and pricing of the content in various formats; even building out from the book as we’ve known it to take advantage of new ways to deliver information and entertainment — are, at best, holding actions. They don’t attack the fundamental problem that is developing for publishers which is this: if you don’t own the audience, the cost of reaching it for one book at a time will be prohibitive.

In the digital age it will make much more economic sense for the owner of the audience to find the content rather than the way we’ve always done it, which is the other way around.


The ebook windowing controversy has subtext

It took me a couple of days of pondering this to come to my current understanding of it, but I now think that Carolyn Reidy of Simon & Schuster and David Young of Hachette Book Group, since joined by Brian Murray of HarperCollins, are not really fighting a battle to rescue hardcover books from price perception issues caused by inexpensive ebooks. What this is really about is wresting control of their ebook destinies back from Amazon.

I first — mistakenly — focused on the economics of the decision announced by Reidy and Young through the Wall Street Journal to withhold ebook editions from the market for a few months on major new releases. I was not the only blogger or analyst to see it that way. The purpose stated explicitly by Reidy to the Wall Street Journal was to protect the hardcover sales from being cannibalized by very inexpensive ebooks. This sounded like a very dubious calculation to me; I just couldn’t see very many people saying to themselves, “I’d have bought the ebook right now if it were available right now, particularly for those cheap ebook prices, but I just can’t wait to read this new book, so I’ll pay extra to read it sooner in a format which isn’t the one I prefer.”

But, reflecting on this, I realized: “I know Carolyn and David are smart people. They wouldn’t flub this math!”

So I thought a little harder. The subtext should have been more obvious.

The penny dropped for me when HarperCollins announced a similar policy. That’s three of the Big Six, three of the publishers that deliver all the high-profile big books to the industry. Publishers Lunch reports today that Macmillan has delayed some books and will continue to look at that strategy, that Penguin might do it from time to time but “not systematically” and, so far, no word from Random House. Random House is particularly interesting since their new key executive decision-maker, Madeline McIntosh, just returned to them from Amazon.

We know something else that matters: agents must, for the most part, be supporting this. The three houses that already announced are (like the others) agent-sensitive and in touch with them all the time. And no agent has stood up yet and protested. There’s an easy answer for any that do; no publisher has announced this as a policy covering all their books. “You don’t want a delay on your author, Ms Agent? If it’s what you’d like, we’ll put that ebook out simultaneously.”

In fact, Reidy hinted at this. She said there was one S&S author who asked to not be included in the list of withheld titles. She didn’t say how they handled it, but big houses don’t generally fight with big authors.

If all of the Big Six, or even just those who have announced this delay policy, stick to their guns then the ebook world may have lost a driver of converts from print. It may be that Amazon has, at least temporarily, lost an important sales tool to move Kindle devices. And, regardless of how this plays out from here, the power of the major author brands — through their publishers today and through their agents forever — to influence the course of development of the ebook market has been so clearly established that I (and other analysts as well) are not likely to miss the point again anytime soon.

So this is really about the agents and publishers trying to take control of ebook pricing, and value perception, back from Amazon. Some further evidence of that comes from the reaction of Len Riggio, Chairman of Amazon competitor Barnes & Noble (vendors of Kindle competitor Nook) who is reported in the Journal piece to be quite comfortable with this tactic, which the Journal characterizes as “in keeping with the long-held practice of issuing paperback editions after the initial hardcover.”

If the other biggest bookseller, which also has a dedicated ereader and an aggressive attitude toward consumer pricing, seems okay with this idea, it strengthens my belief that it is about controlling Amazon, not about controlling ebook pricing. The desirability of restraining Amazon is certainly something the big publishers and Barnes & Noble can agree on.

If the big houses can do this, they can do much more than this. They can sell ebooks direct off their own web sites. (That’s not doable for Kindle at the moment, but they’re eschewing Kindle sales for a time with this strategy anyway.) They can put ebooks into some channels (let’s say ScrollMotion, or the new Baker & Taylor Blio platform) and not others. They can’t tell a retailer what to charge for what they sell them (until somebody figures out how Apple and Bose manage to enforce price maintenance, apparently legally, but without the added complication of a wholesale-supply network), but they can deny a retailer whose policies about anything they don’t like direct access to their content.

How will Amazon respond to this? That is the big question. Their first reaction is to cut the price of the Sarah Palin book, which had been withheld, from their $9.99 point to $7.99. That’s not a conciliatory gesture, but it is a costly one!

Therein lies the irony that is scaring the hell out of the publishers. Amazon pays (approximately, I am not privy to the actual deals) half of the publisher’s suggested retail for these ebooks and then is selling the $9.99 or cheaper ones at a loss on every unit. From Amazon’s perspective, that makes complete sense. They build market share for the Kindle and they build a lot of customer loyalty. And they could even be doing this and still be making a positive margin contribution across all the content they sell for Kindle, even with the losses on the biggest books selling the most units.

So the publishers (and authors) actually benefit from Amazon’s policy; they sell more units and have more margin to share between them on each than they do on the print book.

But publishers don’t trust Amazon to keep things that way. From their perspective, Amazon is building a consumer expectation of an under-$10 price point while they are building up their audience of captive Kindle consumers. How long can it be, publishers figure, before Amazon says “sorry, now you have to sell me these for under ten dollars”?

The most-frequently ridiculed quote in the Journal article from Reidy points to that irony. The Journal quotes her saying, “with new [electronic] readers coming and sales booming, we need to do this now, before the installed base of e-book reading devices gets to a size where doing it would be impossible.” Taken literally, this remark leads to the ridicule that she’s shafting a market where sales are booming. But the subtext is that if publishers can slow down the growth of the Kindle installed base, it will give time for other technologies to catch up and create a more diverse marketplace, which is better for publishers.

There are two important aspects of this that will play out later. One is that what the publishers can do to Amazon today, the authors can do to the publishers tomorrow. If the publishers could sell the ebooks of big books successfully from their sites, then the big authors could also sell them directly without a publisher. The other is that this is a “last gasp” of a “static product” publishing economy. Big moneymakers ten years from now won’t often come from just selling the same content over and over again, but will more often come from content that triggers a more extended interaction. The most future-oriented thinkers are already past this battle, although there’s still a lot of fighting left to be done.

Does the war escalate from here? Do the publishers take their displeasure at Kindle pricing policies and Amazon’s apparent determination to promulgate cheap books to the next level, putting ebooks out in other formats and not Kindle?

And does Amazon, which has shown its willingness in the past to suppress the sale of print books, using its power to control the “buy” button”  to retaliate against policies it doesn’t like, fight back even harder than the Palin pricing decision indicates?

And if Amazon does fight back, do the publishers who aren’t executing this policy (Penguin is tentative and Random House is silent) benefit at the expense of those who are creating this window?

Will authors and agents (and let’s recall that a dozen agents were guests of Amazon out in Seattle a couple of weeks ago; one wonders that have been in any way a prelude to all of this) support the publishers in this policy which, after all, is costing both publishers and authors sales in the short run?

It is hard to imagine this battle ending peacefully anytime soon.

I am so glad that we have some panels at Digital Book World with agents on them and two panels on ebooks — one on pricing and one on windowing — that have both agents and publishers on them. This is one of those conversations about publishing’s future that makes no sense if you don’t include agents in the conversation and DBW is the first major conference on digital change in publishing to do that.


Baker & Taylor has the next big thing in ebooks. Really!

We’re about to see the Next Big Thing in ebooks next month and it’s coming from Baker & Taylor. Baker & Taylor?

For the past ten years, Baker & Taylor in relation to Ingram has looked remarkably similar to Borders in relation to Barnes & Noble. Ingram and B&N are family-owned companies (although B&N has the very significant complication of being publicly traded which, with Ron Burkle as a publicly disaffected shareholder, has been well-reported lately) while B&T and Borders are highly leveraged and controlled by private equity. Ingram and B&N with their long-view management styles have made significant infrastructure investments that the always-looking-for-an-exit B&T and Borders ownerships haven’t matched. Ingram built a great supply chain support structure and digital capabilities and B&N built a well-oiled, customized-to-their-needs internal supply chain. And B&T and Borders have made publishers’ credit managers bite their nails while B&N and Ingram are financially solid.

Over the past couple of years, Baker & Taylor has been cobbling together a team of third party vendors attempting to match the service offering Ingram has bought and built internally. To compete with Ingram Digital’s content conversion and digital repository offering, B&T teamed with LibreDigital. To match Ingram’s ability to set up retailers to sell ebooks, B&T created a partnership with OverDrive’s Content Reserve. And to create a print-on-demand capability like Ingram’s Lightning Print, B&T teamed up with Donnelley, which put a machine in B&T’s Momence warehouse.

All of this made sense to me, but it didn’t add up to B&T presenting any serious challenge to Ingram. But they’ve now developed something that might not only give Ingram food for thought but might have them scratching their heads at Amazon and Google and Apple, as well as ScrollMotion and Vook and anybody else thinking about enhanced ebooks.

On January 7 at the Consumer Electronics Show in Las Vegas, K-NFB  will unveil a new “reading technology.” We in the book business will get to know it as a proprietary ebook platform from Baker & Taylor that has capabilities nothing presented previously can match. The platform is called Blio and creator K-NFB is a partnership of tech visionary Ray Kurzweil and the National Federation of the Blind.

Blio is a software client that can work on “any device with an operating system”, which means computers and iPhones, but not Kindles. Based only on the demo we saw from Baker & Taylor Senior VP Linda Gagnon last week (of course I’d rather be reporting on something I saw on my own computer or iPhone), the presentation is the best I’ve ever seen. The type is crisp and sharp, it has full multiple-media functionality (video, graphics, TTV, links to the web), and it does tricks, my favorite of which is that you can see (on a PC screen) many pages at a time dealt out like a deck of cards. Then you find the ones you want and hone in on them. There are many ways to use that capability, particularly for an illustrated how-to book or a textbook.

The deal B&T is offering the publishing community is pretty compelling. Publishers deliver PDFs, which B&T converts for free to the new format. The publishers get the ebook back with a tool kit that enables totally intuitive functionality that will change styles and layouts, embed links or video or audio and set up the TTV capabilities. If there is a recorded audio of the same text, the toolkit will synch it to the ebook automatically. And users can take notes, or mark up text with yellow (or other color) highlighting.

The setup and tool kit for the publishers is without cost; Baker & Taylor plans to make its money on the transactions. They’re “wholesaling”, on whatever the established terms are with that publisher. B&T will also host and provide ecommerce support to bookstores and publishers who sell direct. There are potential devils in those details but, to start, it is obviously hard for any publisher to resist incremental revenue for no setup cost.

So it is not surprising that Gagnon says B&T has 180,000 titles already committed to Blio, at least 50,000 of which will be available at launch.

If the ebook rendering and toolkit put to shame everything that has been done so far (and they do), the same is true of the retailing presentation. The virtual books look look like physical books on a shelf. They have spines. You click on one and pull it down, rotate it, open it, and flip through the pages. Unless you’re on a PC and want to look at 50 pages at once, that is.

If what I saw on Gagnon’s computer is matched in the actual platform launch, I’ll be shopping and reading on this platform on my iPhone starting immediately. But what is even more intriguing is what publishers — and authors — are going to do with the toolkit.

We’ll assume the Baker & Taylor K-NFB platform works as well in distribution as it worked in the demo I saw this week; then we’re about to see an even richer and more complex ebook world in 2010. We know Google Editions is arriving in the first half of the year. We know the bookseller owners of Kindle and Nook are now engaging every serious book reader in the conversation about reading on devices. We know that the iPhone is a book platform that works for many people, and we know that Android-system phones will be too.

B&T’s Blio system is raising the bar for all of them by combining simple authoring tools with a delivery platform that enables enhanced editions. It won’t take long before many books, and, one would assume, all books that have large audiences will be available in something far more interesting than just a digital rendering of what appeared in print. It will create enormous new opportunities for many of the players, particularly authors, publishers, and the retailers without the scale to push their own devices. And it will put a lot of pressure on all the existing players to take their game up to the next level.

In the spirit of full disclosure I should reveal that over the years both Ingram and Barnes & Noble have from time to time been clients of The Idea Logical Company; Baker & Taylor and Borders never have.

And, of course, we’ve booked Baker & Taylor to talk about Blio at Digital Book World. They’ll appear on the schedule shortly.


Caroline Latham, an old publishing friend I’ll miss

I lost a very dear friend who was a unique figure in the publishing world two months ago when Caroline Latham died in Novato, California. I am pretty sure she was 68 or 69; her close friend Joan was sure she was 70. Even Caroline didn’t know for sure.

I met Caroline in 1978 when my family’s Two Continents Publishing Group, a distributor along the lines of PGW or NBN, and her Latham Publishing Company, a packager of college textbooks, were in their last days. Two Continents was desperately looking for more books to distribute; Caroline was desperately looking for additional ways to monetize content assets she held. We couldn’t solve each other’s problems then, but we became friends and I got to know one of the most extraordinary people on the planet.

Caroline had been raised in an oil-industry family; her father was an engineer. She had grown up in various places in the US and in Iran, and went to Oberlin College very young. She graduated from Oberlin at the age of 16 or so (later events established that she didn’t really know) and, as she put it to me, married the richest young man in town who had a job as a college traveler for Macmillan, putting Caroline in touch with the college textbook business. For several years, Caroline lived a relaxed life, bearing a son and daughter and indulging her lifelong passion for the written word. She read extraordinarily fast and could literally devour several full-length books a day. By the time she was in her early 20s, she had read more books than most well-read people consume in a lifetime.

Then, after they had moved to New York so he could move from sales to being an editor, her husband suddenly disappeared from her life. As I recalled the story, he was discovered a few years later, having had a total emotional breakdown, in Detroit. Caroline abandoned his family’s fortune to him for a variety of reasons — one being that she knew he would need it to live out his life — and immediately shifted to writing textbooks to earn a living in New York for herself and her children, Scott and Sarah Bridge. Her kids were just about grown and out of the house when I met her and she began to work in trade publishing.

The first project we worked on together was for a Warsaw Ghetto survivor named Jack Eisner, who had made a fortune in the US after World War II and then, in the late 1970s, was underwriting the telling of his story through all available means. Caroline ghost-wrote his book, “The Survivor”, and Abby Mann was hired to write the play of the same name (which closed very quickly despite Jack’s efforts to build a success on Broadway.) Caroline and I together made a deal for the book with William Morrow; then she supervised a team following scripts I wrote to augment the house’s sales efforts with calls to bookstores all over the country, an effort that seems rather quaint today but actually produced measurable results back then.

Caroline was really good at the ghost-writing thing. She could “become” any person and produce an appropriate style or voice. She never violated the trust by telling me his name, but I know that she ghost-wrote many of the books and articles signed by the head of the business school of one of the country’s better-known universities. She also ghost-wrote a sociology 101 textbook that became a standard in the field.

From ghost-writing and a brief unsuccessful stint as a literary agent, Caroline moved on to authoring. She wrote celebrity bios of movie and pop stars (many of them penned in a few short weeks): her bio of Michael Jackson hit the bestseller list. She co-authored “Life with Rose Kennedy”with Kennedy secretary Barbara Gibson, another book that hit the lists. She did a bio of David Letterman 20 years ago. Our Filedby web site has pulled together the biggest list available of her credits, but I’m quite sure it isn’t complete.

Of course, the Eisner book doesn’t show up on Filedby under Caroline’s name; it was ghost-written. Another project we worked on together that was ultimately published was a book to reveal the duplicity of Nixon and Kissinger in the Vietnam War by a Denver lawyer and peace activist name Joe Amter. There were others…

By 1990, Caroline’s kids had moved to the West Coast: Scott was pursuing a career in Seattle as an agent for exotic travel and Sarah was in the real estate business in San Francisco. Caroline moved to the Bay Area and, with Sarah, started a new business called RealFacts. RealFacts is a database surveying rents and occupancy in multi-family housing, a business Caroline grew and ran — sometimes with Sarah’s help and sometimes without — until her death.

But none of this — not raising two kids without a husband; not writing dozens of books; not even picking up, moving on, and starting a completely new business at about age 50 — describes what made Caroline so extraordinary. You see, she couldn’t. That is: she couldn’t see.

From the time I met her, I was aware that she had trouble with her vision. She wouldn’t know me if I passed her on the street (we lived not far apart in New York, so that happened.) She had to hold written material very close to her face or look at it through very thick glasses. She drove a car, but admitted to me that she probably shouldn’t (she drove slowly and, as with everything she did, with a huge application of intelligence.) Apparently she had an accident earlier in life that rendered one eye absolutely useless; the stark worsening of diabetes in her 50s, concurrent with the ailment that compromised her heart, robbed her of much of the rest of her vision and for the last years of her life she was legally blind.

But, somehow, she read; she wrote; she built and ran a business.

It was in the late 1990s that Caroline suffered an infection which lodged in her heart and induced congestive heart failure. The Mayo Clinic branch in Phoenix told her in 1998 that she had three months to live. She then took over the custodianship of her own health care, pretty much telling the doctors what to do from that time on. A few years later her kidneys also started to fail, which is when I learned (from her) that just about everything that helps the kidneys hurts the heart, and vice-versa. She was managing a very sensitive balance, which she did — for years.

Her health issues became further compounded with a digestive malfunction that, as far as I know, was never successfully diagnosed. But it meant she was deprived of one of her great pleasures — eating. What used to be a source of great joy and amusement became a chore and a challenge. But she persevered and, although she went from being a rather large and round lady to a lean and frail one, she cheerfully lived with the condition for the last several years of her life.

Caroline was a totally unique mixture of a brilliant intellectual with eclectic tastes that ran from very middle-American to quite sophisticated, the former being perhaps a product of her family’s tight connection to a little town called California, Missouri (she called it “CalMo”) right in the center of the state. She could parse professional material in business, science, medicine, statistics, and real estate. But she loved gossip about movie stars and celebrities, spending time at the beach (when I met her her “ambition” was to own and run a small hotel on a Caribbean island), sports, and pop culture. (A CD of her favorite music that she gave out at her 65th birthday party was testimony to that: it starts and ends with Ray Charles and in between you find artists as diverse as Frank Zappa, Leonard Bernstein, and the Beatles, and June Carter Cash!) She was not a beautiful woman, but she usually had an affectionate and caring boyfriend, often a Caribbean man with a limited education. She related to everybody.

And she cared about everybody. She not only wrote more books than any two people I ever knew, she also lent a personal helping hand to more people than anybody I ever met. Over the years, RealFacts had employees who were down on their luck or otherwise found themselves in dire need. Whether through fault of their own or not, Caroline was always there to help them. Sometimes they let her down and she had to let them go, but if they got on new meds or turned a corner some other way, she’d take them back.

I found out that Caroline didn’t now how old she was when she had her 65th birthday party in Novato in 2005. She celebrated the party because she found out that Social Security thought she was 65, even though she thought she was 64! I remember getting that party invitation in about January and her birthday was in June. We wondered whether she’d make it; she was already frail, it was years past the 6-month death sentence from the Mayo Clinic, and she was on the heart-and-kidney teeter-totter that was the story of the last decade of her life.

But she did make it; she made it to that party and for several years beyond, including a wonderful 1-week trip back to Manhattan, along on which she brought an entourage and took an apartment on West 55th Street. She continued to consume books (by audio now, with the help of a friend named Don Christensen in New York who remotely picked out the books to be delivered to her for her from the local Marin County Library System.) She put a program on her computer that blew type up to a huge multiple of its normal size — so big that you had to move the type across the screen with the mouse to read more than a word or two at at time, and she continued to read and write. (I know because she answered my emails!)

Being Caroline’s friend for the past several years has meant knowing a phone call delivering news you don’t want could come at any time. I got the call last May from Caroline’s friend Joan Winer Brown, who told me Caroline was about to die. She had been taken to the hospital with blocked intestines, unable to take in any more food. Doctors were telling her there was no point to surgery; Joan felt they were about to stop heroic efforts.

But a month later the news had changed. Caroline had, from the depths of her illness, mustered the strength to tell the doctors and her caregivers, “yes you will operate. Do whatever you can that might save my life.” And they did. Caroline moved to a rehab facility by the end of June.

I last spoke to her on the phone when she was in that rehab facility and about to go home. Talking on the phone was something Caroline always loved to do. Her voice was weak, but her mind was clear. She knew the odds against her were long, but she was determined to manage things toward a solution as long as one was possible. She was happy to be going home.

I’m glad she got that last couple of months in her own house and the feeling, to the end, that she was in some ways at least the master of her own fate. She leaves a daughter and granddaughter and son and brother and countless friends who will never forget her and her kindnesses, and will certainly never meet another like her.

I am indebted to Caroline’s close friend Joan Winer Brown for some key information that is in this post.