Big publishers have reason to be happy about how the book market is evolving

Posted by Mike Shatzkin on June 21, 2010 at 1:51 pm · Under Authors, Community, General Trade Publishing, New Models, Publishing, Publishing History, Self-Publishing, Supply-Chain, Vertical, eBooks


Big publishers have to be very happy about how things have been developing in the ebook world over the last six months or so. In that time, we have gone from a situation in which Kindle appeared to so totally dominate digital reading that Kindle-only publishing seemed an imminent threat to disintermediate publishers to one where it is not only Amazon’s hegemony that is threatened. Even their position as the ebook market leader isn’t safe.

Although one of the big factors in this change, the iPad, was unforseen at the time, we wrote around 16 months ago about the possibility that Amazon’s position leading the pack on ebooks would be hard to defend in one of the first posts on this blog.

As the ebook world has evolved (so far), we have the following “facts on the ground.” You will see from this recitation why so many people outside commercial publishing see eliminating DRM as a key to ebook marketplace efficiency. Our guess is that, regardless of the merits of the idea, going DRM-free is a non-starter for the big houses because it will be a non-starter with most big authors and most big agents.

1. If you buy an ebook from the Kindle store, you can read it on many devices within the Kindle reader software. That software is currently available for the iPhone, iPad, iPod Touch, PC, Mac, and Blackberry with Android reportedly on the verge. If the Kindle book has no DRM, though, you can read it on any reader that supports the Mobi format or you can use a program like Calibre to convert your Kindle book to epub, which can be read on just about all other devices.

2. But if you buy an ebook from Kobo or BN (through their “reader” software, not for the Nook), you can do the very same thing (and Kobo’s Android app is at least a bit ahead of Kindle’s; it was announced over the last weekend).

3. If you buy a book from iBooks, the iPad bookstore, you can only read it on an iPad and, soon, on an iPhone. That is, unless it were DRM-free which is, some are told, an option for publishers.

4. If you want to read on a Kindle device, you can only read books you buy from the Kindle store (unless you select from DRM-free mobi files, which leaves out the biggest books).

5. If you buy a Nook, you can theoretically read epub content obtained elsewhere by putting it through its DRM paces at Adobe Digital Editions, but it ain’t easy. My expert on these subjects, Kirk Biglione, points out that this is one of the big advantages of loading devices through wireless means (which sidestep having to deal with ADE) rather than computer synching. Because ADE is a challenge for most people, the interoperability across devices promised for epub files is, for protected files, more theoretical than real.

6. The Sony Reader is like the Nook: theoretically able to handle anything epub but made much more difficult by Adobe DRM. Sony is also suffering at the moment from having no apparent mobile strategy.

7. Bottom line: DRM creates hassles if you try to read on anything except the platform on which you bought. But Kindle, Kobo, and BN Reader (not Nook), provide a pretty seamless experience across devices.

8. The promise of the presumably-imminent Google Editions is that you will be able to read them on all systems that browse the web (except that Kindle’s browsing is not going to provide a terribly satisfying experience and Sony, which doesn’t provide a web browser, is probably left out of the Google Editions party).

So the e-ink devices generate the real lock-in, or, more often, lock-out, problem. It is your Kindle device that locks you into the Kindle store; your Kindle file can be ported to a non-Kindle device using the Kindle reader software.

This is a mixed, but probably mostly negative, blessing for future sales of Kindle devices. On the one hand, consumers who figure this out will be increasingly unwilling to chain themselves to a reader that makes them buy files they can’t use elsewhere. On the other hand, the spouse of a friend cracked her Kindle a few days ago and because of the hundreds of books she’d bought over the years from the Kindle store, couldn’t really consider purchasing any other reader as a replacement. So she bought a new Kindle.

So while the Kindle store almost certainly still has the most titles of any ebook retailer, Amazon is definitely facing some uphill battles selling devices to new customers. Even before the iPad hit in April, DigiTimes reported that Nook devices outsold Kindles in March. (Could this be the power of 700 retail locations talking after the cream of the online customer base had already been harvested by Amazon over the past 2+ years?) Then they reported yesterday that total e-ink monochrome ebook reader sales were 700,000+ for April and May, of which 37% were Nook and 16% were Kindle. In the same two months, of course, Apple reports selling 2 million iPads. So, in two months, iPads outsold Kindle devices about 20 to 1.

That means that even if 2 million new iPad owners, on average, buy 1/3 as many ebooks as 700,000 new single-purpose ebook device purchasers, the larger, full-color, web-ready screens sold in the last two months would be responsible for as much ebook consumption as the book-dedicated devices.

Meanwhile, the device prices are coming down sharply. Kobo announced a $159 device on sale at Borders a month ago. Since then Borders announced their own branded device for $119. Then Barnes & Noble cut the price of the Nook to $149 for the wifi model and $199 equipped with 3G. Many had been anticipating a price cut before year-end by Amazon from the $259 level they have maintained; but the B&N move forced their hand and Kindle just announced they were coming down to $189. Because aside from all the competition that Kindle faces on the device side, the Agency model has made it harder for them to keep customers loyal with a pricing advantage on the biggest books.

What this adds up to is that a much more diversified marketplace is developing for ebooks than publishers would have dared hope for a year ago. This, in turn, makes the customized ebook offering that Ingram is enabling (as they announced last week in a deal with F+W) even more powerful, because more and more devices — and therefore consumers — will be able to readily take advantage of ebook offers that aren’t served up from the Kindle store. Since one of the great unmet challenges of book sales on the web is merchandising — making it quick and easy for consumers to find what they want — curated offerings on specialized sites might really work better for a lot of people. And then Amazon will feel some of the pain that big publishers do, being horizontal in an increasingly vertical world.

On the other hand, big publishers have apparently lived past the danger of a massive problem: the possibility that authors could find most of their audience by setting up with Kindle alone. There is still more complexity to be added. Google will arrive shortly with a big splash. Newcomers Copia (a client of Idea Logical) and Blio are still planning market entries in 2010, and they each have some unique propositions the current players do not. The more different places an ebook might successfully be sold; the more variety in the way ebooks get merchandised; and the more benefit that can accrue from effective distribution of files and metadata; the more a publisher with some savvy will look like a sensible option to an author who might be thinking of a do-it-yourself effort.

There was a conference called Untethered last week. I didn’t go because it was an “all publishing” conference about technology, and I am skeptical about any horizontal approach. But there was a panel of publishing CEOs asked to estimate how much of book sales would be ebooks five years from now. The high guesses were 40-50%. I think they’re low. And if the question is what percentage of the books that are narrative writing are ebooks by five years from now, I think they are way low. (Apologies to the first batch of people to see this post and those who got it by subscription because I hadn’t quite finished this thought when I put it up. I saw it later and fixed it.)


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  • MosesSiregarIII
    I'm an aspiring writer trying to choose between traditional and indie publishing, and for my 2 cents, the things you mentioned here as benefits of traditional publishing wrt ebooks wouldn't greatly interest me. Like another commenter said, it's appealing to me that an independent author can reach so many different markets on his own, including Amazon's, Apple's, B&N's, etc.

    And here's the thing. You wrote: "the more a publisher with some savvy ..."

    But how many big publishers appear to have savvy when it comes to ebooks? None that I can see. Fighting Amazon to actually raise prices of new ebooks to above $10? That's the opposite of savvy, IMO. I think a dedicated author can do quite a lot independently today.

    Btw, I saw you mentioned J.A. Konrath, but fwiw he argues that his prior exposure with a traditional publisher is not the reason why he's been successful with his ebooks, and he often points out that many successful indie authors have no prior traditional exposure (or even websites or blogs, for that matter). That's all debatable, but that's his pov on that subject.

    On the subject of iPad ebook sales, I found it interesting that the AAP's ebook sales data for April was not significantly better than for March (it was actually noticeably worse when looked at as a percentage of total revenue), since we would've had iPad users buying ebooks in April.

    Is it quite possible that iPad users are not actually buying many new ebooks? I've seen the vague numbers from Apple about "downloads," but how many of those are sales? Ebook sales revenue went up and up every month for a while, but when iPad hit the market the sales numbers actually dipped down (as a percentage of total publishing revenue). Granted, iPads are selling like hotcakes, but how many really serious book readers are using iPads for that purpose?
  • When you interpret those ebook numbers for April, remember that 5 of the 6
    major publishers cut their prices by 30% or more, and that what you're
    seeing is publishers' receipts, not consumer spending. In fact, consumer
    spending was up because, as you pointed out, the publishers changed their
    policies to raise consumer prices.

    The anecdotal evidence is that the increase from about $9.99 for a branded
    ebook to about $12.99 hasn't hurt sales. One publisher reported to me that
    raising a bestseller further from $12.99 to $14.99 did, so the publisher put
    it back to $12.99.

    If you have no reputation, I definitely agree that the price differential
    you can achieve selling it yourself (bringing it down to $2.99 or $3.99 or
    less, if you want) can help you get more sales. Maybe a lot more sales.

    The strategies you ridicule do indeed make no sense in an ebook only world.
    The publishers raised prices to lessen the competitive disadvantage of print
    and brick-and-mortar. But we're still living in a 85% or better print world.
    It will be 70% a year from now, but it will be two or three years before
    print is down to half of the sales. (And most people in publishing would
    consider that a very aggressive timetable.) The way you're looking at it
    will make more and more sense with each passing day, but the people who have
    to do a quarterly report this quarter and next are not nuts to be preserving
    print sales, for which they *and their authors* derive the vast majority of
    their revenue.

    Mike
  • MosesSiregarIII
    I agree that for the big houses, raising ebook prices to protect print sales over the near term might make very good sense; I don't know, but that's certainly defensible and I recognize their dilemma.

    That's interesting about the $9.99-to-$12.99-to-$14.99 results. Thanks for sharing that.

    Can you clarify what you mean in the first paragraph above. You seem to mention that 5/6 cut prices by 30% or more, and then mention that they raised (ebook) prices. Do you mean that 5/6 raised prices? Or they had raised prices before, then cut them in April? I don't know, btw, when agency model pricing really went into effect on ebooks. When was that?

    Mike, here's something that, from all I can tell, isn't being factored in when we look at publishers' receipts: independent book and ebook sales. With ebooks in particular, I think this is becoming a significant issue. If I read a $1.99 indie ebook (say, a Konrath book), this doesn't show up with publishers' revenue or therefore in terms of the percentage of how many books read are ebooks (or does it?). Because of this, it seems that we'll reach that 50% level of ebook-vs-print sooner than the publishers' receipts will show.

    And to ask a basic question, I'm not sure I understand the distinction between publishers' receipts (net?) and consumer spending with the AAP numbers. Thanks very much for responding, by the way.
  • I have written extensively on the shift publishers made from selling on a
    wholesale basis to selling on an agency basis. You can see one such post
    here<http: blog="" whats-so-hard-to-understand-about-random-houses-strategy="" www.idealog.com="">.
    If you poke around the site, you'll find a lot more. You might search
    "Agency Plan" and get a few.

    It's complicated, but the bottom line is that the prices retailers paid
    publishers went down, but the prices consumers paid retailers went up. The
    difference was more margin for the retailers. The five out of six refers to
    the five of the six major publishers who made the switch to agency and whose
    books were the ones where the unit price paid to the publisher went down and
    the price paid by the consumer went up.

    Mike</http:>
  • MosesSiregarIII
    Ah, gotcha. I fully understand you there. Did that agency pricing come in mainly in April, then?
  • I believe it began in a Big Bang on April 3. Effectively, yes.

    Mike
  • MosesSiregarIII
    Okay, let's see if this makes sense.

    AAP numbers:

    Month/Ebook sales/Total book sales tracked by AAP

    April/$27.4 million/$629.8 million
    March/$28.5 million/$458.2 million
    February/$28.9 million/$486.3 million

    So ebook revenue for publishers has been pretty steady for the last few months with AAP data, even though in April, we had two major new factors:
    1. iPad sales (first month)
    2. Agency model, which means less $ to publishers per book sold

    #1 should be a positive for ebook revenue (more sales, via iPad), and #2 should be a negative (higher ebook costs equals less sales, plus less publisher dollars per ebook sold).

    That makes it look like iPad sales were helpful, though I'm not sure how helpful--maybe considerably, though. Although, an increase in ebook sales should be expected anyway at this point (more ereaders sold every month, etc.), but that does make it look like iPad sales could've made a significant impact in April.
  • Yes, those numbers show a *big* jump in ebook sales in April even though the
    unit price paid to publishers has fallen. That squares with what I've heard
    anecdotally. But remember AAP numbers are quite incomplete (based on a
    handful of publishers reporting.) And if we were measuring what consumers
    paid for ebooks in April, the rise would have been even greater.

    One other thing. Apparently the number of new big title releases in April
    was much higher than earlier in the year. That would also be part of what
    drove up the volume but we certainly see no evidence that the price
    increases (*and* disruption in the supply chain: remember that books were
    not on sale in a bunch of places during the switchover from wholesale to
    agency) slowed down ebook uptake.

    Mike
  • Mike,

    I forgot the definition of what constitutes a post-Gutenberg publisher, as in, namely: a post-gutenberg publisher - non-drm

    The relevant model is shareware... by not worrying about selling every book, giving a percentage away, sometimes a large percentage, developers receive, in return, relatively free advertising and often global BUZZ. Many shareware companies make million-dollar profits on a conversion ratio of as little as 1% to 6%, retaining control of their product with a very low overhead. Shareware has been the Internet model for decades and is entirely rational for the individual writer, though very few understand it.

    Why should writers worry about corporate publishers? Writers have been exploited by them for centuries.

    Cut the Publishers. Here's how...
    Time for publishing to change... Tell your friends...

    Earthrise Press® eBooks
    a post-gutenberg publisher - non-drm
    http://books.fglaysher.com

  • Your bottom line question was: why should authors worry about corporate
    publishers?

    I'm not sure they should. But any author seeking a substantial advance to
    enable them to write a book (or to make damn sure they make some money on
    it) will have to solicit a corporate publisher. That money isn't going to
    come from a new model publisher.

    What authors need from publishers is *audience*. If a publisher can't
    deliver sales of content, there is no reason for any author to think about
    them at all. The first question for *any* author talking to *any* publisher
    is "how many do you think you can sell?" And the second question would be,
    "on what basis do you think that?"

    If there's no *experiential* basis, then the response would categorize that
    publisher as one the author shouldn't spend any time thinking about. Whether
    they're corporate or not.

    So I'd agree to "cut the publishers", but not based on whether they're
    corporate. Cut the publishers who don't have any marketing or distribution
    capabilities to deliver sales. They're worthless.

    Mike
  • I've been one of your regular readers for nearly a year. I respect and have learnt a lot from you.

    It seems to me most of your reflections are concerned with what's good for the publishers and geared to helping them move their monopolies to the Internet. As a poet, I'm concerned with what's best for writers and readers and believe publishers have stopped serving the best interests of the culture.

    It's long been observed that corporate conglomerates do very little to promote a book, and over the decades have come to do less and less for the author, especially in some genres.

    For the most part, the books that receive an advance have increasingly become the popular fiction and non-fiction and talking-head tripe that largely betrays and undermines the culture in favor of shareholders, doing little to nothing for real writers, literature, or the civilization, eroding it for the most part. In the Post-Gutenberg Age, most writers who are taking the deceptive carrot of an advance ought to think twice and do the math.

    The entire thrust of the digital revolution has been towards greater freedom and independence of the individual from oppressive control of one kind or another. As self-appointed gatekeepers, corporate publishing conglomerates merit only to be swept into the dustbin of history, following the music industry, film photography, print newspapers, and similar dinosaurs.

    The Internet, POD, Jason Epstein's Espresso Book Machine, ebooks and other developments have already demonstrated during the last decade that marketing and distribution channels no longer reside with publishing conglomerates, who really have ceased serving authors and books, and have become an impediment to the advance of culture.

    The individual author no longer needs the traditional publisher. Here is what any author on earth can now do, go directly to the reader, worldwide:

    Earthrise Press® eBooks.
    A Post-Gutenberg Publisher, non-DRM.
    http://books.fglaysher.com

    Here are some of my further thoughts on why they should:

    Publishing in the Post-Gutenberg Age
    http://www.fglaysher.com/Post_Gutenberg_Publishing.html

    Frederick Glaysher
    http://www.fglaysher.com
  • Thanks for the note and the kind words. As you know if you read the blog, I
    follow the attempts of writers to self-publish pretty closely and I have at
    least one client (Bookmasters) that offers a lot of help for authors wanting
    to do just that. And, as a poet, you know that I've pushed the Poetry Speaks
    initiative, which does more than any publisher does to help poets find an
    audience.

    However, for those authors that can get a decent contract from a major house
    (fewer every year, but still thousands every year, damn few poets among
    them), they almost certainly will get more money and more fame from doing
    that than they will from self-publishing. And their *future* self-publishing
    efforts will work better if they have been published by a legacy publisher
    first. Just ask one of the most successful self-published authors there is:
    J.A. Konrath.

    And I'll let the commercial for your services and domain stand on the site
    (though I often don't); I just need to say I don't know anything at all
    about it and writers should check it out without thinking it comes with an
    endorsement.

    Mike
  • Thanks for responding again.

    I regularly read your blog, have it set as my home page on one computer, and read your Poetry Speaks piece when you first published it. Your long career in publishing has obviously given you the perspective for real insight into past and current changes taking place.

    I think your "vertical" idea is right on target with what has evolved, and I would think you've helped a lot of other people and publishers understand what makes sense with the emerging ebook market. As you suggest in various messages, Poetry Speaks, Harvard Common Press, and your other examples of "vertical" communities, based on shared interests, have and are bound to take many forms. You’re right that it seems to be happening much faster than many publishers realize.

    I think, though, with time, many writers are going to come to the realization that I have. The technology now exists to market and sell one's own books, both POD and ebooks, directly to the entire world through Lightning Source and one's own ebook website and credit card service.

    In my view, Bookmasters and all the other traditional self-publishing service companies are increasingly less necessary and useful, though there will always be a segment of writers and people who will turn to such companies, needing their help, along the lines of Dan Poynter, Lulu, iUniverse, and so forth, moving into ebooks, through Smashwords and similar ventures.

    For a very small monetary investment, any writer with moderate technical computer ability, can go around all of those companies, marketing and selling to the entire world, not just the USA. The ebook market is truly global. That’s what’s so fascinating about it to me. Facebook and other social networking makes reaching that global market very easy.

    I have to disagree with your evaluation of traditional publishers and what publishing with them amounts to. I think you’re underestimating how much change has already taken place and how little the traditional publishers of poetry and literature in the United States actually have to offer. Compared to self-publishing, there are no decent contracts with traditional publishers. They’re not capable of recognizing or promoting anything really new and significant in literature. They’re a large part of the reason that a very dead and decadent literary period continues to drag along.

    The Post-Gutenberg Revolution provides the means to go around all of them... and reach readers throughout the entire globe.

    Best wishes,

    Frederick Glaysher
  • The things we're good at are easy for us. You're clearly very good at
    marketing your book online. I agree that making the content ubiquitously
    available isn't hard and Ingram is a great choice to help with that. And I
    agree that author-based marketing is the best kind. But I don't agree that
    every author is equipped to do it in proportion to how equipped they are to
    write books people would want to read. If you have made self-publishing of
    literary-type material a remunerative enterprise, then I think you'd have
    value to add to others who produce material suitable for a similar audience.
    That would make you a publisher and it would make those people published
    authors, not self-published. Building communities one author at a time is a
    hard way to do it.

    Mike
  • I agree that not all writers have the ability nor desire to handle the technical issues involved with web sites, html, epub formats, marketing, and other such things. Given the wide range of human ability, there will remain a place for many of the intermediaries (predators, in some cases) who have forever made a living off writers and self-publishers of various quality. As you realize, they’re been making the transition to the Internet for more than a decade with POD and now Smashwords and many other venues.

    I would say, though, all of those issues are much easier than writers who feel intimidated by them realize. For instance, there are only about a dozen html codes one has to learn to transfer a manuscript into an ePub or Kindle book. Anyone who has already put a web site together won’t find it difficult. Most who can use a wordprocessor and html editor have the skills. Publishers would be mistaken if they allowed themselves to think there are major technical hurdles that are going to save them.

    As examples accumulate of writers who have put it all together, in addition to the prerequisite of being real writers, fewer and fewer writers will turn to the traditional publishers. They simply don’t have anything to offer. They betrayed whatever credibility they ever had long ago. Jason Epstein’s Book Business is only one notable work that muses on the deeper issues at the core of publishing’s problems. They’re also intimately connected with all the problems of higher education and cultural angst of modernity. Most of the current corporate publishers and mergers have only been around for some decades and mark a definite decline, in their own way, for publishing and culture. For the most part, recovery and renewal lies not through them, but around them. In diminished forms, most of them will probably linger on for some time, but the writer is better served by a contract directly with Amazon, Kobo Books, Lightning Source, and other quality vendors, and selling his or her books directly to readers, which will be become ever-more commonly done.

    I don’t believe “building a community one writer at a time” is applicable to what I’m suggesting. It seems to me your “vertical” only applies to the kind of general non-fiction, run-of-the-mill kind of thing that publishing has become for most of the culture. What books the new online ebook publishers and vendors are choosing to place on the home page of their sites is not an encouraging sign for our culture; indeed, it bodes ill, demonstrating that the corporate mentality has no sense of the social obligations that publishing at its best should really be about and entail.

    I’m more interested in reaching the audience that Saul Bellow was fond of reminding people actually existed and which continues to exist, awaiting always the writers and books that will help it move to a higher level. The roughly 50,000 to 100,000 and more college educated people interested in and capable of understanding serious cultural and literary issues, discussion, poetry and literature, as in the case of Allan Bloom’s The Closing of the American Mind, global issues now... I believe that kind of success can now be done without the mega New York publishers, despite them, since they really stand with the universities in opposing anything beyond their own limited and defective sense of what should be published, what’s possible.

    To this effect, I have a recent brief essay on Saul Bellow’s last book and Allan Bloom on one of my blogs, if interested.
    http://fglaysher.com/Reviews/saul-bellow-ravelstein-allan-bloom

    Whatever the near and short term hold, it’s an exciting, exhilarating time for publishing and writers!

    Best wishes,

    Frederick Glaysher
  • Frederick, I think I value brevity more than you do.

    When you say "anybody who has put a web site together won't find it
    difficult" you've just eliminated most of the writers. So I'll rest my case.

    Mike
  • It's a shame there are so many formats for so many devices. Is it possible that one day we will have the VHS solution for ebook formats? Small, medium and large publishers are already offering multiple formats via Amazon, Apple, B&N, etc. No one wants to leave any part of the market untapped. It's most difficult for the consumer who has to pay attention to purchasing ebooks that work on their devices. You can tell from comments posted that a fair amount of resentment exists towards proprietary formats. The future of the open source formats may rule the future- or will Apple rule the day? Regarding self-publication..and micro online publishing..it's here to stay. Already thousands of ebooks of the non-fiction variety are published this way. Many fiction books are being published by sites like Smashwords. If major publishers think that they can prop up losses from sagging print sales by keeping ebook prices near the height of the cost of a paperback they are mistaken. Another problem exists which will need to change. Many ebooks are sold in their country of origin only- some stores only selling to US citizens, some ebooks rights only for US consumers. This must and will change. People all over the world want to read ebooks right now, at the right price and in the format of their choosing on the device of their choosing. Market beware- the customer is always right in the long run.
  • Anthony, it isn't *formats* that are causing most of the problems, it is *
    DRM*. Except for Kindle, just about everybody else is working with epub, but
    getting the epub you bought at Barnes & Noble to work in an epub reader you
    bought at Borders requires you to manage Adobe Digital Editions which
    apparently can challenge the techiest mind.

    Smashwords sells DRM-free, which, if everybody did, would make moving things
    around a lot easier. Perhaps unfortunately and perhaps irrelevantly, it
    would also make stealing and sharing and avoiding paying for content a lot
    easier too. At the moment, publishers have very little choice about this,
    whatever their opinion, because big authors and their agents are persuaded
    that they need the DRM software to protect their sales. Not all the big
    publishers are equally concerned about piracy (although several are
    *very* concerned),
    but all of them are very respectful of what big agents think.

    I learn all the time about people's consumption habits being different from
    mine. Last night a friend told me that he always skips to the end of a book
    to see how it concludes when he's in the early stages of reading it. I think
    that's nuts and I figured it was really unusual. He says about 25% of people
    do it (according to his mother-in-law survey.) So I am a bit out on the limb
    saying I don't think re-reading books is a big deal, which makes them
    starkly different from music (which is *often* consumed repeatedly) and even
    from video (which is, in my intuitive opinion, consumed a second and tenth
    time far more often than a book.) You have to know how much repeat use there
    is to evaluate how much of a problem you're creating for people by making it
    difficult with DRM or anything else.

    And we don't know.

    Mike
  • Sean Cranbury
    Great conversation, Mike.

    My personal choice as someone who consumes a lot of books and supports the industry with a radio show and book blog is to NOT adopt ebooks until the DRM issue is solved -and even then, who knows?

    And if that never happens then I really don't care.

    Static files - in ePub, pdf, mobi or whatever - are next to useless and by their very digital nature have a negligible cost.

    Books are worth paying for, digital files, especially those encumbered by DRM, have nowhere near the same value.

    To me. I understand that for people like Kassia and many others the digital file has increased value and that's fine.

    But let's take it further - the advent of devices like the iPad are more significant than the Kindle because of their allowance for interactivity with and participation by the 'end user'.

    The way to 'beat the pirates' isn't to put a flimsy digital lock on an infinitely replicable digital file.

    It is to create an experience that cannot be copied. To empower creators to develop stories that allow the reader to participate and to create new, unpredictable narratives or explorations of the book's content*.

    I know that this sounds ridiculous but imagine Brian Eno's Bloom app (http://www.youtube.com/watch?v=YJkMdm5T1PY) combined with a Mark Danielewski book and maybe we're moving towards a vision of what I am getting at.

    Also note that what I am talking about is the books created in the present moment and in the future.

    As for the static files I recommend doing away with DRM entirely as it sends the wrong message in every sense and for publishers to do a better job of connecting with their audiences and cross pollinating the value inherent in the print edition with the digital one.

    This is done very well in the resurgent vinyl record market that often includes DRM-free high quality mp3s with the records that I purchase.
  • Sean, I always say that the answer, when it comes to the Internet, is "all
    of the above." I personally have no interest in interactive experiences
    instead of books and I get plenty of value from ebooks (which is that I can
    read them anytime I have my iPhone, which is any time...) On the other hand,
    all of what you're talking about is the subject of our new Enhanced Ebook
    University <http: e2bu.com="">, which you might want to check out. I thought
    up and drove E2BU to happen because I think a lot of people, time, and money
    are about to get dedicated to doing things with books we never thought about
    before and I figured that some sort of education and discipline would be
    useful.

    Mike</http:>
  • Sean Cranbury
    Thanks, Mike!
  • robert wahl
    Will somebody here please cut to the chase and tell a writer/illustrator which device, or service, is most likely to fit his/her purpose of self-pubbing with color cover and perhaps illustrations in amongst various chapters!

    Haste yee back ;-)
  • Still not quite ready for prime time. But close. I'd contact our clients at
    Bookmasters and I'd try to get ahold of Blio, the new Baker & Taylor
    initiative about to launch. Blio will be the ticket, I think. But
    illustrated is still a ways behind straight text.

    Mike
  • Mike,
    I'm not sure I get the title of this post. What is the distinction you are making between big publishers and not big publishers?
  • Not big publishers are not as threatened as big publishers by the change.
    Smaller publishers often have value propositions besides putting books on
    shelves (like hand-holding, or, more crucially, subject-domain expertise and
    branding.)

    But I see your point. Any publisher that feels its authors might look at
    self-publishing as a more promising alternative should be happy that in the
    ebook sphere, at least, it is getting a bit more complicated.

    Mike
  • Mike,

    I agree that the big guys must be happy that the kindle threat is receding.
    But there is a danger that they see that as a removal of the OVERALL threat to the model from digital publishing and distribution.

    I know you touch on this in the post but that world of a vertical player is not necessarily one populated by the existing publishers unless they begin to take it seriously.

    The flip side of the receding danger posed by amazon's dominance of ebooks is that authors can now access several different audiences with a little extra work per file. If they were willing to do it for Amazon and Kindle, they'll figure out ways to do it for Kobo, ipad, nook, Sony Reader, and all the rest.

    So while the immediate tactical danger posed by Amazon has receded, the larger strategic concern of disintermediation of the industry's traditional model remains.

    Eoin
  • I don't disagree with you, Eoin. The future still requires verticality, and
    the big trade guys will very likely not do that.

    I think the multiplicity of ebook distribution points will, at least
    marginally, discourage self-publishing. Although Ingram and O'Reilly and
    Bookmasters and others have propositions to make this relatively simple,
    having to engage (and pay) an intermediary makes it quite a different
    proposition than if you can just sign up at the Amazon self-service screen.
    It slows down the disintermediation and dilutes it.

    Mike
  • Unless you use someone like Smashwords as a distributor! But in general I think your point is well made.

    For the larger authors though, paying an intermediary and taking the lions share will become increasingly attractive. That would be my worry for the big guys. as you move down the author success scale the rewards for self publishing will surely decrease.

    Eoin
  • I had breakfast last week with a Lion of Big Publishing for the last quarter
    of the 20th century. He said he didn't understand why big authors weren't
    self-publishing back in *his* day; he certainly expects to see more and more
    of it now. As success becomes increasingly brand-driven (as opposed to
    marketing-driven, or distribution-driven), the already branded authors have
    less and less reason to share much with the publisher providing marketing or
    distribution.

    I think we're probably both glad we aren't running a major house. It is hard
    to see much stability for that group more than a couple of years out.

    Mike
  • I can see both the problems and the potential for them Mike.

    But one thing is clear, they'll be much slimmer and much smaller machines in five or ten year than they are now, if they exist at all.
  • Talk about the "potential" for them, Eoin, because I am finding that very
    hard to see.

    Five years from now? Yes, perhaps slimmer.

    Ten years from now? Hard for me to imagine anything but a legacy copyright
    management business.

    Mike
  • They have relationships with writers who delight readers. If they cannot leverage that properly in this age of interconnectedness then they ought not pretend to willing to survive by changing.

    It might mean accepting deals that give the author more control, maybe even more money than they do even now (and for the top authors that probably means more unearned advances or some similar arrangement).

    But if they can harness those authors NOW and build with them real reader engagement NOW. Then I think they have the potential to survive.

    One of the great things about a community once it is forged is that it is bigger than the sum of parts. Once the links are established leaving it becomes a tough decision and if the publishers control the basic structure (so long as it isn't manifestly exploitative) they can hope to retain small, medium and large authors within the fold more effectively than if they don't.

    Your eyeballs monitised as it were via a community of interested readers! Not easy, but then no-one ever said it would be!
    Eoin

  • Sorry, but I don't think it works, except as a temporary palliative. The
    publishers don't have the standing with most writers to take the type of
    control they'd need to build barriers to switching, which is what you're
    suggesting. And agents are pretty alert to that.

    Creating communities with writers rather than with subjects is obviously
    going to be happening, but I think it is going to be very tricky and only
    come after a lot of trial and error. I think the big publishers'
    relationships with writers are marriages of convenience, based very largely
    on the publishers' willingness to pay substantially for the connection. The
    ability to pay is going to diminish as the trade weakens. Fledgling
    publishers (like Richard Nash or Jane Friedman) will pick off some of those
    authors as a middle ground between big advances and complete
    self-publishing. But, ultimately, I think the author-driven communities are
    more likely to be organized by readers than by publishers.

    The one thing the big publishers are bound to be weakest at is direct
    consumer connection. They have no history of it and no skill sets for it.
    They need to move in that direction but tackling one of the toughest of all
    problems (figuring out which authors to string together) isn't the way to
    begin. The pretty obvious place to begin is "genre", which many are, but --
    compared to the pure genre publishers -- not very effectively.

    Mike
  • Should have been clearer.

    I meant that the authors would foster community by genre (on the vertical) rather than individually, though as you point out, in some case that might work!

    Eoin
  • When it comes down to it, I guess my thinking re potential revolves around what I'd be doing had I the resources: Taking some crazy risks that no corporate boss would really be able to sanction!

    That and taking lots of small bets and hoping!
  • Dsucher
    I don't follow Amazon's rules so maybe this is too obvious.

    So if you (physically) break your Kindle, then Amazon will not allow you to transfer your Kindle-purchased books to an iPad? Using iPad's Kindle reader, of course? Amazon will not allow transfer (by whatever technical means you'd be using with a new Kindle, which I assume means by Whispersync.)

    Seems dumb and punitive if that is so. The big money for Amazon is not going to be the "razor" i.e. the Kindle. (That must be on a thin margin at best.) The real money is from ongoing purchases of the "blades i.e ebooks for years to come. I've made more money for Amazon by buying books on my iPad (using the Kindle Reader) for 2 months than by buying paper books from Amazon for the past year. So I can't see what Amazon would be losing by allowing interoperability.
  • David, no Amazon rule in effect here. Kassia could read her Kindle ebooks on
    the Kindle platform on any device it works on, which includes several
    mentioned in the post. But she apparently doesn't want to read on any of
    those that she owns. Maybe she doesn't have an iPad, or maybe she thinks it
    is too heavy for her purposes. And it is much cheaper to replace her Kindle
    than to buy an iPad she doesn't otherwise want or need.

    Amazon *promotes* interoperability between *devices*. They just don't
    promote interoperability between reading platforms!

    Mike
  • KassiaKrozser
    Mike is correct (and I wish I saw this response before mine below). The truth is I have all the devices mentioned (except Android, though there are noises being made in that direction by the other member of my household), but I greatly prefer reading on my Kindle to reading on the iPad (the glare and weight are negatives for me). I read on my iPhone in interstitial moments. I read on my laptop all day. (And while I imagine we will be a two iPad family at some point, I'm not agitating for my own because it's not meeting my needs. Yet.)

    Amazon allows, generally, downloads to 5 devices (or five downloads). This number is actually set by the publisher, not by Amazon or any other retailer, so may vary and may be hard to determine. I believe Apple is five as well. When I get my new Kindle, I will face the download limit for some books. For personal and professional (largely testing) reasons, some titles have been downloaded five times already, though mostly only read on one or two devices.
  • KassiaKrozser
    DRM-free is the solution, but as you note, it's not likely to happen anytime soon. The fears of piracy are far too great, and it's near-impossible to convince publishers, much less authors, that DRM isn't doing anything to prevent piracy.

    So readers are locked into the system they choose. The retailers have no incentive to open up their platforms. And consumers have every reason in the world not to switch. After several years of extremely extensive use and worldwide travel, I broke my Kindle in a stupid accident yesterday. Given my investment in the books, there is no way I would consider another device (and I live with someone who can hack the DRM if need be). In fact, one reason I didn't invest in a Sony Reader was my concern that it wasn't going to be around in the long run.

    (I should note that only one publisher I've purchased books from since I got my Kindle offers me the option of redownloading my books in a different format. They subscribe to the "you buy the book, not the format" camp, and I buy unencrypted MOBI files from them directly rather than Amazon.)

    Not to be overly picky (ha! you know me), but there isn't necessarily a correlation between the number of units shipped (as indicated in the Digitimes) artlcle and the number of units actually sold by the retailers. The article suggests Amazon is reducing inventory in anticipation of the Kindle 3. It's no surprise that the iPad is selling in huge numbers, but I'm wary of extrapolating those sales to book sales for any one retailer.

    I think the ability to touch and play with the nook is contributing to its success, hence Amazon's move into Targets (nook and Sony are available at Best Buy). There is a lot of consumer interest and awareness, but people want to know what the experience is like. I tested a nook in-store recently and was less-than-impressed (and I wanted to love it because I think Barnes & Noble has a great strategy, at least on paper!).
  • Thanks, Kassia.

    I have no doubt that B&N's in-store attention sells devices. But I also
    think that the monochrome e-ink devices are going to increasingly be
    challenged. Cheaper color devices are coming.

    Your point about the lack of a necessary connection between devices sold and
    content sold is important. You can read all the major distributors' stuff on
    a variety of devices (iPad, iPhone, PC, Android, etc.) On the other hand,
    you can pretty much read only Kindle-sold content on a Kindle device and
    Nook-sold content on their device.

    Mike
  • KassiaKrozser
    Mike -- I think I am misunderstanding you (or just brain dead after a long day). The Kindle *platform* runs across all the devices you mentioned, quite seamlessly. Since my Kindle is out of commission, I picked up the book I was reading, where I left off, on my iPhone. I could then shift to the iPad if it weren't in use. Or my laptop. In fact -- and this is pure conjecture -- I'd wager most Kindle users have no real sense they are hindered by DRM because they can read their books on pretty much any digital device. It will be when they try to switch from the Kindle platform that they'll realize the limitations they've bought into (and the anger will be as much directed at publishers as Amazon).

    Yes, I can only purchase from Amazon and those publishers who choose to sell unencrypted MOBI, but, right now, that means I have the best selection and mostly good prices (trust me: agency hasn't lead to great pricing, but it has created some unintentionally hilarious prices).

    In fact, I have greater freedom than I would if I were locked into the ADE system.

    Amazon's platform approach is being replicated by BN (slowly but surely) and Kobo. I would add Apple, but I'm not sure they'll extend iBooks across so many devices.

    As far as color is concerned, it's a nice-to-have feature for me. I have a list of things I'd rather see first: better quality, better metadata, actual covers included in the file, more backlist, etc. I am of the belief that there will be a market for many types of devices. Maybe pure grayscale eInk will fade into the sunset, but the non-glare, dedicated reading device will remain important to a certain class of readers.
  • Boy, I really butchered that last sentence, didn't I? What I meant was that
    Kindle was the only eink ereader on which you could read the Kindle content;
    that content wouldn't work on a Nook or a Sony Reader or a Kobo Reader. So
    my presumption was that you wanted that kind of device to read on and you
    wanted to keep your content, which is why you had no choice.

    I always knew you could read Kindle books on an iPhone. In fact, I'm doing
    that right now because my wife had already bought the Stieg Larsson trilogy
    to read on the Kindle device and I'm reading them now. (If I'm buying for
    myself to read on my iPhone -- my only book-reading device -- I get Kobo. It
    delivers ragged right and Kindle on the iPhone doesn't.)

    Mike
  • KassiaKrozser
    I tried to parse it, but was, as mentioned, brain dead. I do consider your ragged right thing when evaluating reading systems. It reminds me that different readers want different things, and dictating reader experience is a dangerous thing.

    So, yes, I like the dedicated eInk device. I've read on everything possible over the years (including the Rocket eBook), and for the type of reading I do, it's my preferred reader. But if not available, I will go through the digital reading version of graceful degradation, falling back to the devices I prefer, in preferred order.
  • Sean Cranbury
    Excellent conversation!
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