Something caught my eye this week that has been very little commented upon elsewhere: the news that Hachette Book Group developed an app-making capability that they are now licensing out. Their first customer was Round Table Companies, a book packager.
I found this striking because big book publishers are not generally known for developing technology; they’re more likely to be buyers of it. This is not an ironclad rule: Scholastic has an ereading platform in development to satisfy the special needs of the children’s book market and it is trying to work with other publishers who might want to avail themselves of the platform.
But from the standpoint of one who has observed publishers wrestling with technology for many years, this deal is very unusual. When Random House bought Smashing Ideas, a technology company, that seemed like the likely course for big publishers to take: acquiring technology that could be useful to them after it had been developed by somebody else.
There are other companies and entrepreneurs developing app-making tools. Most big publishers would be trying those out and getting great deals to do so because the companies making the tools need the validation of having them used by major players. The fact that Hachette even attempted to develop this capability on its own is unusual; that they succeeded at making something useful and cost-effective to the extent that Round Table preferred their solution to one developed by technologists is why it is worthy of comment.
Even acknowledging that selling the tech to a packager is not quite the same as selling it to a direct Big Six competitor, I don’t know if this is a harbinger or an outlier.
But I do know that it challenges one of my long-held assumptions about publishers and technology.
When you invest in intellectual property, whether publishing a book or developing software, you normally want to monetize that investment across the widest possible range of customers which you can only do by distributing through the widest possible array of channels. That’s the handicap Amazon has right now being a publisher: they don’t have effective distribution to brick stores and, as long as they want to keep what they invest in restricted to the Kindle for ebooks, it is pretty certain that they won’t. Over time, the number of brick stores will diminish so that will matter less and less and, if Kindle retains its position of primacy among ebook retailers, what is a real handicap today may become trivial. But traditional or legacy or real (pick your adjective) publishers really do have a wider distribution base than Amazon for books published today. (That doesn’t mean they will necessarily sell more, but it does mean they should!)
By the same token, I never thought it made much sense for a publisher, on its own, to develop software for product development or distribution that should have industry-wide application. I figured it would be hard for one publisher to sell software to another; the buyer would be afraid they were just permanently strengthening the margins and the hand of a competitor.
That same fear of strengthening a competitor is the reason that other types of collaboration that would seem obviously synergistic, like for publishers who do science fiction books to join together to create a science fiction community, haven’t happened. There was a moment a couple of years ago when Macmillan’s Tor.com suggested they’d start selling other publishers’ books to their community and invite other publishers in to strengthen it, but that never happened, even though it can’t make sense in the long run for what are ostensibly genre-driven communities to be siloed by publisher. I felt the same logic applied to publishers doing software development.
But that long-held assumption of mine is being challenged, by Random House buying Smashing Ideas and planning to keep it going as a provider of services to competitors, by Scholastic developing its own platform for displaying digital content and recruiting other publishers to join them, by three US publishers combining to create the new retailer Bookish (and three UK publishers replicating that idea with a UK version called Anobii), and, most dramatically, by Hachette creating an app-maker that a leading book packager finds a cost-effective way to build apps.
We still don’t know what will work. Will Smashing Ideas thrive under Random House ownership? Will Scholastic succeed in establishing a new reading platform for children’s books that can find a prominent place in the market? Will Bookish or Anobii succeed at becoming an important force in ebook sales alongside Amazon, Apple, Kobo, Google, and B&N?
And will what Hachette has done with their app-making capability be a trick they can repeat, developing technology to meet other challenges publishers face? Will Hachette become a specialized software vendor, developing publishing-specific tools, as well as a book publisher?
If so, they have found at least one formula that can help them through what are bound to be increasingly challenging times for general trade publishers.
We’re staging a conference next week in San Francisco which is a reprise of the very successful and well-received eBooks for Everyone Else event that we did in New York on September 26. We have a great show in San Francisco, adding a talk with successful self-publishing author Bob Mayer; a presentation from Penguin’s Molly Barton about their new Book Country initiative; a very interesting group of agents that will be interviewed by Charlotte Abbott; and a reprise of our “speed-dating” 1-on-1 sessions for attendees with service providers and experts to enable everybody to get their specific questions answered.
One major highlight of the show is going to be a presentation by my Publishers Launch Conferences partner, Michael Cader, which sorts out the myriad distribution and go-to-market choices facing today’s self-publisher. Michael did thorough research for this segment and, having seen the outline of the talk, I am certain it is the clearest and most complete survey of what has been a confusing and cluttered landscape of services that anybody attending will have ever heard.
Undoubtedly, Michael’s summary and analysis will make it to the web in the days after the conference, but if you’ll be in or near San Francisco next Wednesday, November 2, it alone will be worth the price of admission to eBooks for Everyone Else.