Global

I spoke last Thursday at the 2nd annual IfBookThen conference in Milan staged by the Italian ebook retailer Bookrepublic. On Friday, I teamed up with the UK literary agent David Miller and Penguin US’s Molly Barton, formerly an editor but now the company’s Global Digital Director at a “workshop” session staged by the same organizers. Molly is also the empresario of the new author services site from Penguin for genre fiction called Book Country.

We got a bit of a cultural education. The Thursday conference was attended by about 300 delegates from across Italian publishing. Judging by appearances, this seemed to be a pretty senior crowd; there were very few people there in their 20s. That makes sense. The same thing is true at Digital Book World and Tools of Change and for the Publishers Launch events Michael Cader and I deliver. These conferences cost a fair amount and require a lot of time away from the office (a full day for IBT and for most PLC events, two or three days for DBW and TOC.) Junior staff can’t afford the money and can’t get the time.

But there was one distinct difference between the Italian audience and the audiences I’ve seen at those other events or at others I recall speaking at in Canada, Brazil, the UK, and Denmark. The Italian audience hardly asked any questions! I got one on Thursday. Most of the speakers that day got none. I found this baffling.

At lunch, I was standing at a round “rest your plate of food” station with four local attendees. They all spoke English well. (Simultaneous translation in both directions was available for anybody who needed it.) I said, “you in the audience need to talk more! Where are the questions?” One woman theorized that the problem was that Italians were just too polite; they were reluctant to call attention to themselves by asking questions. (Milan is in the industrial North of Italy. Most of the time I’ve spent in Italy has been in the South — Rome and Capri — and I certainly wouldn’t have characterized the wonderful culture down there as overly polite. Maybe the North is very different.) I agreed that questions are sometimes used as a platform to make a speech and that wasn’t welcome when it happened. But, still…

The event on Friday being billed as a “workshop” had a smaller, and not quite so senior, audience. There were perhaps 80 people. The focus was the changes in the relationship between publishers and agents. Molly explained Book Country, what Penguin had in mind when they launched it, and how it was an acknowledgment of the change in circumstances and choices for authors. David had been provided a list of questions solicited from attendees in advance. My job was to provide “context”, a sense of the environment in which these publisher-and-agent negotiations were taking place.

We brainstormed with the organizers how to encourage more participation. An alternate explanation for the reticence we’d experienced came from an Italian agent, who thought that people weren’t asking questions because their bosses were in the room. Well, it’s another theory…

I followed a suggestion, starting my talk at the workshop by asking the audience to self-identify a bit. I asked editors, agents, those who worked with straight text, those who worked with illustrated books serially to raise their hands. I made the point that I was giving people practice at putting their hands up; we were all hoping that they’d continue to do so throughout the show. I actually got a few questions. So did Molly.

But David had a different technique that, coincidentally or not, appeared more effective. He waved a box of fine British chocolate-covered mints in front of the crowd and promised a wrapped piece of candy to each person who asked a question. (When I asked David a question myself from the seat alongside him on the dais, he even gave a piece of candy to me!) Whether it was to get the chocolates or because David’s presentation and expertise evoked more active interest than Molly’s or mine, or because participation begets participation, he had a successfully interactive two hours with the audience. It was impressive.

The one question I did get the first day actually led to a provocative exchange that I think opened some eyes in the audience. I was asked how big I expected the Italian ebook business to get and how fast. I asked what percentage of Italian book sales were ebooks now. I was told “2%.” I asked what it had been a year ago. I was told “about 0.7%.” If those numbers were right (they could well not be, but I’ll bet they’re right on the growth rate), the percentage tripled.

“Is there any reason you’d expect it to slow down in 2012 or 2013?” I asked the audience. The consensus was “no.” I pointed out that one more tripling would take them to 6% and another after that would be 18%, which is not far from what the US number is now. (If you believe the starting percentage was low, then add one more year to get to 18%.)

The next day, David Miller talked about an author he represents whose percentage of ebook sales had gone from 1% to 11% in one year! I made the point to the audience that this might be the single most important fact they’d have learned in two days to illustrate the rate at which things can change.

Last year at the same IBT event, there seemed to be very widespread skepticism that Italy had much to worry about from ebooks. Then Amazon introduced the Kindle this past December, about 60 days ago. Suddenly, the skeptics are in hibernation.

Apparently the same thing has happened in Brazil since I went there to speak 18 months ago and found a lot of resistance to the idea that ebooks would spread or that bookstores would suffer. The Brazilians I’ve talked to since, and the non-Brazilians who are planning expansion of book and ebook sales to new markets, all see that a robust growth of the ebook market in Brazil is around the corner.

It always seemed understandable to me why ebook takeup, and its companion disruptor, online transactions for print, first got traction in the US. You can’t beat a market of 300 million people with one language, one currency, and one set of commercial regulations as a place to launch a new delivery mechanism for media. We see the dampening effect in Europe of high taxes (VAT) on ebooks and the relatively small language silos that exist side by side. We see the challenges to online ordering of print as well as to ebooks in less affluent parts of some countries, including Italy and Brazil, presented by the lack of capital for investment in infrastructure. Many people can’t afford readers for ebooks. Many can’t conveniently get to the Internet to order hard goods and, even if they can, the ubiquitous parcel delivery infrastructure our Internet merchants depend on doesn’t exist the way we’re used to it. And many people don’t have credit cards. All these factors slow things down.

The hard goods delivery bottleneck is difficult to address, but the readers are getting cheaper and the mobile phone has proven to be an effective banking-and-credit mechanism where none had existed before. I find it hard to believe that highly differential rates of screen reading to overall reading between countries is a permanent condition. Cell phones are proliferating everywhere. Printing and distributing books is, ultimately, a lot more expensive than delivering them to a cell phone. Readers are getting much cheaper; the Kindle costs about 80% less than it was when it was introduced four-plus years ago.

I think in time we’ll all end up in pretty much the same place in our ratio of ebooks to printed ones for straight text reading. If that’s going to be the case in a few years, then the places that haven’t been experiencing rapid change so far are in for a roller-coaster ride in the years to come that will make what we’ve lived through in the US and UK seem very tame by comparison.

I suspect that at IfBookThen 2013, the audience will feel moved to ask a lot of questions and whatever cultural barriers there were this year will be overcome by the urgency of adjusting to an environment which signals that cultural barriers are made to be broken.

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The week I spend each year at the Frankfurt Book Fair is always the most stimulating week of my professional year. The concentration of the best thinkers and most powerful people in publishing always seems to lead me to a new burst of understanding about our global publishing world, particularly in these times of rapid change.

I saw one Big Six CEO who noted that I had said last week that I expected the US publishers to be living in an 80% ebook world pretty soon although the global head of another of the Big Six companies had just stated the belief that the switchover to digital would stop, or slow down significantly, at 40%. I respectfully disagree, but will save that argument for another post. The one I talked to, who chuckled about the wide disparity in these two predictions, didn’t express an opinion about which of us was right, but the implications of the two predictions are so different that it behooves the people running the biggest companies to at least consider mine, even if they believe his.

I also talked to a business development executive for one of the tech companies that has been converting backlists from print and pdf to epub. He made the point that his business remains robust but moves around the world as new markets discover serially that they need to get their intellectual property into digital form. We agreed that those of us who make a living on the digital transition — and that certainly includes me at the moment (what are you reading this blog for?) — have a few more years ahead of us before we’ll have to figure out how to make a living on the new reality (if we need to keep making a living when it arrives…)

With the deals announced at Frankfurt by Kobo with the English retailer WHSmith and the French retailer Fnac along with the quickening pace of store openings by Apple and Amazon, the future shape of the ebook retailing landscape has been more clearly defined. It looks to me like we’ll have three principal global players that will be active in every market — they being Amazon, Apple, and Kobo — plus perhaps a local contender in each market as well. Barnes & Noble has played the latter role extremely successfully so far in the United States; Waterstone’s will attempt the same in the UK starting next Spring; there is local competition in Germany; and certainly there will be in many other countries as the ebook revolution laps at their shores. Google, being Google, will not go away, but they will remain a relatively marginal player unless and until they put considerably more energy into their solution and into promoting what they have.

The Kobo deals are the game-clarifiers, if not game-changers. A sage observer of the digital scene stopped at my stand here in Frankfurt to discuss the WHSmith-Kobo arrangement with me and he wondered whether this was the best deal for both sides. Should Kobo have been trying harder to make a deal with Waterstone’s? Is it wise for WHSmith to be making a deal where they sell the devices but connect them to a Kobo-branded store?

But that, of course, is the key to the deal. The economics of the devices don’t work unless you also can sell the ebooks to go into them. (That’s the answer to all the geniuses who think Barnes & Noble is being thick not implementing an international rollout of the Nook!) Neither WHSmith nor Fnac is principally a book retailer: books are just another product line in stores that sell other things and have a broader identity. By selling a reader attached to an ebook store that serves customers well, they buy themselves relevance to the book consumer during the transition and extend their lives as booksellers. They demonstrate recognition that building and maintaining a ebook store is not a trivial undertaking and, in the face of several global competitors, not something they want to undertake from their position as a country-specific, and more general, retailer.

By tying up with Kobo, both WHSmith and Fnac can get into the market with ereading devices at about the same time as Amazon brings in the Kindle. And WHSmith launching for Christmas 2011 should be terrifying Waterstone’s, which will be months behind with devices and almost certainly delivering a less consumer-friendly store off the bat than the experienced Kobo offering will be.

Barnes & Noble has achieved startling success at establishing a strong second-place position in the US ebook market, but their situation may prove to be unique. First of all, they’re in the biggest single ebook market (by value, even though poorer markets may pass them sometime sooner in units) we’re likely to see for a decade or more. Second, they are a very serious book retailer that has built strong relationships among book publishers worldwide over many years. And third, their execution was nearly flawless. Even with their precedent as an example, there is no guarantee that Waterstone’s, or anybody else, can pull off what they did in another market.

So if it is a global game and you have to be a global player to be competitive, as well as a “whole ecosystem” game that requires devices attached to a well-stocked and well-presented econtent retailing environment to succeed, we can see the steep uphill fight to be waged by the other players trying to compete with Amazon, Apple, and Kobo, whether they be Google, Copia, Sony, Baker & Taylor’s Blio, or the new entrants financed by publisher collaboration: Anobii in the UK and Bookish in the US.

All other things being equal, I can see a global ebook marketplace that some years from now is 90-95% controlled by Amazon, Apple, Kobo, and a local player in each country, with Google getting most of the rest. Google may punch above its weight on the long tail because discovery of the obscure or highly niched content might be their forte; one scholarly publisher told me at Frankfurt that he is already seeing some real growth in his Google sales, which no trade publisher has said in my earshot yet.

But all other things may not remain equal. One informed member of the European digerati told me he believes that the European Competition Commission may outlaw the agency model in the European Union. Were that to happen, that would tilt the playing field substantially toward Amazon. It is ironic that the biggest, strongest, and most deep-pocketed competitor for global ebook sales could be handed an enormous competitive advantage by bureaucrats ostensibly trying to foster a competitive marketplace. Publishers may have deficiencies in their understanding of the digital transition, but it would appear that the government bureaucracies the world over might be far more confused than the publishers are.

I’m posting this before I leave the Frankfurt Book Fair on Sunday afternoon, European time. I won’t have the opportunity to respond to any comments until at least Monday night London time. I drive with a friend and the charming little hotel we stay at in Monschau doesn’t have wifi and I don’t have the digital dexterity (with “digital” in this case referring to “fingers”) to do lengthy replies on my iPhone.

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Our Publishers Launch Conferences venture is doing two shows in Frankfurt: a full-day “eBooks Around the World” program on Monday, October 10 and our first conference dedicated to children’s book publishing, “Children’s Publishing Goes Digital”, which will be a half-day program on Tuesday, October 11. We’ve enlisted the capable help of Lorraine Shanley of Market Partners International to program the children’s show. This post will talk about what I’ve been developing for the all-day Monday program.

There are other things going on, but there are two central themes for Monday: data and retail.

We are always focused on data about digital change because in this transitional time we’re in, none of us can get enough of it. Things are changing fast and if you haven’t looked at the thermometer in the past week or two, you probably don’t know the temperature. That’s even more true on a global scale, because global data is that much harder to get and track.

We are focused on retail because the list of “major accounts” for all publishers will be changing in the next few years. Global players will often (but not always) be replacing local ones as each publisher’s biggest intermediary customers. The ebooks marketplace in the US demonstrates how rapidly new channels can rise with the Kindle and Nook.

To begin the day at Frankfurt, we will have what we believe is the most comprehensive research report yet produced about the digital transition country-by-country and region-by-region. The Milan office of the global consulting firm, A.T. Kearney, working in conjunction with Italy’s Bookrepublic, will update and expand some substantial research they did at the end of last year. They presented their findings at the IfBookThen conference in Milan in February.

The Publishers Launch Conferences team — Michael Cader, Emily Williams, and I — have suggested some additional lines of inquiry around the intrusion of English and the expansion of the global players’ activity which we believe will enhance the already-robust research the Kearney team did before.

We’ll have a data presentation of a different sort from Jonathan Nowell of Nielsen, the company which both is the guardian of a worldwide bibliographic database and the operators of BookScan, which collects point-of-sale information around the globe. Jonathan is going to focus on how metadata affects sales and specifically how deficient metadata costs sales. The lessons here will be the ones everybody will take home and implement immediately. Nowell will point publishers to the metadata fixes which are absolutely necessary to avoid sales leakage.

The retail conversations and presentations will be sprinkled throughout the day.

We wanted to focus our audience on what we consider to be a remarkable story, the resurgence of Barnes & Noble in the digital realm since the introduction of the first Nook device 20 months ago. B&N’s success in using their brick-and-mortar presence to combat Amazon’s two year head start with the Kindle is a case history that retailers in every country in the world will want to examine carefully. That’s why we’re giving it close attention.

Theresa Horner, B&N’s VP for Digital Content and Patricia Arancibia, Manager, Digital Content, International, will join Michael Cader and me for a conversation about how they did it. They started out with a Nook that was pretty similar in price and features to the monochrome e-ink Kindle, but then they carved out their own device niche by offering Nook Color and a touchscreen version which, to this point, nobody else has matched. The color capability enabled B&N to expand their ebook product offering to include content, like magazines and children’s books, that wouldn’t work well on a Kindle or original Nook device.

But they also expanded their content base of non-English publications, building a Spanish-language store for their domestic US market that is more comprehensive than any other in the world!

All of this has propelled B&N to a spot where they are a significant challenger to Amazon’s ebook supremacy in the United States. There have been some recent indications that Nook devices may now be outselling Kindle devices, although not everybody agrees with that proposition.

Many countries have a dominant brick-and-mortar retailer that is contemplating an impending challenge from Amazon. Whether or not the B&N formula is replicable in other markets, perhaps by licensing the Nook or the Kobo reader or the new Google reader or another device, is still a fair question. The answer might be much clearer after the B&N section of our show.

But B&N has not (yet) announced any plans for a global presence. Four other ebook retailers that will grace our Frankfurt stage are declared global players.

David Naggar of Amazon.com will talk about what publishers around the world should do to best benefit from Amazon’s continuing global expansion. We know that Amazon will be a market leader in every country they enter. They are the biggest account for most US publishers today and they will be a top account soon for every publisher in the world if they aren’t already. Tips from their experience about what works best for publishers to increase their sales are useful to every publisher in every language. We had a presentation from Amazon at our Digital Book World show in New York last January which attendees all agreed was helpful and enlightening; we’re expecting the same at PLC Frankfurt.

Tom Turvey of Google will also have a lot to talk about at PLC Frankfurt. Google has just announced a Google ereading device and we keep hearing rumors (although not yet directly from them) that they will be pushing their ebook capabilities hard this Fall when a host of new tablet computers hit the market. Google’s program is the only one really built for participation by retailers and web sites everywhere and there has been a pretty widespread uptake by independent stores in the United States in the program’s opening months. If the biggest dominant chains in each country will want to pay close attention to what B&N has to say, the independent stores around the world, and the publishers that depend on them, will be paying close attention to what Google has to say.

Kobo just opened a store in Germany, following quickly on Amazon’s heels in the biggest single European market with a title base larger that is larger than Amazon’s and larger than the German aggregator, Libreka and with a special reader for the German language. They have said they’ll have stores opening in Spain, France, Italy, and Holland in the next few months. We’re working out the details with Kobo about what they’ll discuss in conversations early next month, but we know they’ll be on the program. Kobo has been distinguished among their competitors so far by their declared willingness to share sales data with publishers and, indeed, they have established a reputation for revealing things we didn’t know about the market at presentations they have made before. Kobo is the purest ebook play among the global competitors that have been in the market for some time; all the rest have other fish to fry.

But there’s a new entrant to global ebook retailing that, like Kobo, is (at least for now) purely about ebooks. That would be the UK-based start-up, Anobii.Their CEO, Matteo Berlucchi, will explain their very enticing proposition to enable crowd-sourced curation and taxonomy for books. On Anobii’s format-agnostic discovery-social platform, you’ll be able to follow a book, an author, a reader, or a topic, and you’ll be able to name your own topics. The basic functionality is supposed to go live in the next month or so and we believe our October conference will be a debut of sorts for what promises to be an entirely new approach to ebookselling. And publishers will be excited to hear that Anobii intends to share data with their vendors as well.

It could well be that the retailers we will have on the stage at PLC Frankfurt will be delivering half the sales or more for most of the world’s publishers in a few years, or perhaps even sooner than that.

Data and retail are our features, but there will be much more covered in the show.

Tracey Armstrong, the CEO of Copyright Clearance Center (which is, along with Perseus Constellation, one of our Global Sponsors) will talk about the importance of collective licensing to capture revenue that will otherwise be lost in a world where any fragment of any book might be a key component of somebody’s new app or web site.

A panel of agents will discuss the emerging new models in that segment of publishing’s value chain.

We’ll have what I think will be a very provocative panel of trade publishers who are benefiting from the fact that their company works in segments other than trade which made the digital transition sooner.

Octavio Kulesz did a pioneering study of the digital transition in the developing world that suggests that entirely new tactics will be called for if publishers are going to realize revenue from the masses who will read books on cell phones, but can’t afford to pay much.

Chris Bauerle, the Director of Sales for Sourcebooks, a mid-sized (or perhaps we should say small-major) US trade publisher, will explain their transition to a digital workflow, done a few years ago but paying off in big ways now that they want to use their content in new creative ways.

And Michael Cader and I will have a thing or two to say as well.

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Monday, July 4, was supposed to be a quiet day in the publishing business. It turns out it wasn’t. Three developments reported as special holiday bulletins by Publishers Lunch have strategic implications worth pondering that will have trade publishing people all over the world conferring with their friends and colleagues as soon as they shake the sand off their shoes and settle in to read the weekend email.

First of all: Amazon.com bought The Book Depository. What? You’ve never heard of The Book Depository? Well, then you’re almost certainly one of my US-based readers (about 60-70 percent of you.) The Book Depository is really the other global bookstore. They don’t do ebooks, but they’ve bult their global book business to more than $150 million. No, that’s not as big as BN.com, but they have built a sophisticated many-to-many supply chain (they don’t do it holding stock in distributed warehouses like Amazon), have been growing by something like 30-40% per year for several years, and might even make money.

They’ve even invested heavily in untangling the metadata challenges of global book sales, with a large team in the Middle East tackling the problem.

If anybody were going to mount a global challenge to Amazon as a single consolidated book (and content) distribution business worldwide, The Book Depository was the platform to do it from.

This move by Amazon reminds me of when they acquired Mobi-pocket early in the last decade. In the dawn of the ebook-on-devices era, there were two formats competing as pawns of a hardware competition. Microsoft pushed MS Reader, Palm pushed their own format. Mobi had the clever idea of being able to play on either.

So Amazon acquired Mobi. That meant that they owned the only single-file solution; any other retailer trying to serve the market would have to offer both Microsoft and Palm as a choice to reach all the devices. Palm quickly took that option off the table by insisting it would serve all its files itself. That’s when B&N went out of the ebook business, not to return in a serious way until after Kindle launched in late 2007.

It sure looks to me like The Book Depository would have been a great launch platform for Barnes & Noble to go global.

Second: Pearson, owner of Penguin, became a book and ebook retailer by the purchase of the relevant assets from the bankrupt REDGroup. It appears they will run the business, web sites under the Borders and Angus & Robertson brands, with a minimal staff.

Pearson is a big company whose interests go far beyond Penguin, but it is the trade implications of this that catch my trade-centric eye. Big trade publishers are caught between a rock and a hard place on direct selling and customer ownership. Whatever the future may hold or require, trade publishers today are highly dependent on their intermediaries’ good will. It would likely cause untold grief with Amazon and Barnes & Noble if a major US trade house set up a direct selling operation, despite the fact that niche publishers often have them as adjuncts to community or professional publishing efforts (Wiley, O’Reilly, McGraw-Hill, F+W Media, Interweave. In fact, Pearson owns half of Safari, a direct-to-reader subscription service pioneered and co-owned by O’Reilly. They also own part of CourseSmart, but they’re now selling books and ebooks direct to consumers, not just content-by-subscription to geeks and textbooks to students.)

It might be well down the list of reasons why Pearson Australia is now running online trade selling operations, but it will be interesting to see how Penguin Australia benefits from the association.

Third: J.K. Rowling and the agent that actually handled her business, Neil Blair, have left the Christopher Little Agency which formerly employed Blair and was the agent of record for Rowling. Lawsuits may ensue, but this is another lesson in what disintermediation can mean and it recalls to me something I learned long ago from a lawyer in the music business.

My mother, Eleanor Shatzkin, had a chunk of her consulting career when she designed billing systems for law firms. (This was in the days before personal computers; “data processing” back then was done on punch cards sent to job shops for print-outs to be created.) So she made friends with a lot of lawyers. One of them, a very nice man named Don Engel, left the large New York firm where he’d been a litigator and moved out to California and set up a practice in the music business.

What Don told me (this was in the early 1980s) was that he found a phenomenon out there that didn’t exist in New York because people could start a law firm with just one client, and they often did. (As he said, you can’t take a piece of the AT&T business and set up shop, but you can take one big recording artist.) That meant these firms had no broad capabilities, and if any real legal challenges arose, the little firm with the big client would need savvier outside counsel. Don built a substantial business suing record companies over royalties on behalf of artists, getting cases referred by these tiny “firms” with one star client because he developed a reputation for being an honest guy who wouldn’t poach the client in turn!

I don’t want to suggest that what Rowling and Blair are doing is likely to become a trend. In fact, the prevailing industry conditions at the moment would, I think, mitigate against it. Agencies are more likely to consolidate than to splinter because the capabilities they need to serve their clients effectively are growing with digital change. Whatever threat there is to publishers from disintermediation would require that agents do more and have greater organizational capabilities, not less.

On the other hand, new services being offered by agents that other agents could employ might allow unbundling of the direct client contact from the rest of the agency functions.

I hope you had a really restful 4th of July weekend. The second half of the year begins with plenty to think about.

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It looks like we’re going to have a bit of an unintended debate stretching across several of our panels at the Publishers Launch show in London. Since I’m the guy who put the show together, I can speak with authority to the fact that it was really unintended. But I consider it serendipitous and proof of Branch Rickey’s axiom that “luck is the residue of design”.

I first started probing the question of new business models for agents two years ago when I was organizing the first Digital Book World conference. I had been asked by F+W Media to create a program that would be (in their words) “more practical” than they found Tools of Change to be. I was in partnership with O’Reilly at that time working on a “StartWithXML” show to take place in London. I wasn’t really looking for a reason to compete with them; we were collaborators.

But as I thought about what they did (which I like) and what I might do, I realized that our approaches would be different and our shows would be different. In my mind, the clearest delineation of the difference was that I put agents squarely into the middle of our show planning. This move is a bit counterintuitive in the conference business since agents have never been big ticket-buyers for the industry’s digital education events. But I thought then — and events have subsequently confirmed — that agents were key actors in the digital transition. You can explore the tech challenges of digital change without them, but you can’t really think about the changing economics of trade publishing without bringing them into the conversation.

What seemed logical then — also confirmed by subsequent events — is that agents might become ebook publishers. This had actually happened a decade before, when agent Richard Curtis set up his E-Reads business at a time when most publishers just wouldn’t do ebooks for most titles, if at all. Richard had run into political problems with the agents’ association (AAR) which I believe he headed at the time. They have a code of ethics which could be interpreted to prohibit an agent-publisher such as he had become. In fact, I was a bit surprised (but definitely sensitized and enlightened) when a good friend of mine who is a successful and highly ethical agent told me she couldn’t possibly participate in a conversation that might be seen to endorse the idea of agents becoming publishers.

We put together a panel on “new models” for agents at DBW 2010. We repeated it last year (even though there’s a natural reluctance to repeat things year to year), and we surely are going to include the topic at DBW 2012 next January.

And that brings us to what is going to happen in London on June 21.

We have four prominent agents speaking on different panels on the program. At least three of them are likely to renew the conversation about whether an agent can become a publisher and still be a credible representative for an author.

One of the panels I’m most looking forward to on that day is called “An Emerging Opportunity: Selling into the US”. Charlie Campbell, an agent at Ed Victor Ltd., will participate on that one. We wanted Charlie on the panel based on a conversation we had with him a few months ago about the possibilities he saw for his office’s clients to capture sales in the US through ebooks. When Victor’s office announced the creation of a new publishing operation to handle their own authors’ books, our interest heightened. So Charlie will be explaining how that publishing operation will work and how it benefits the authors in their stable within the context of capturing US sales from a UK or Ireland base. His fellow panelists will be publishers.

Our last panel of the day has Michael Cader and me interviewing four leading luminaries of UK publishing. Three of them are publishers, but the fourth is the agent Jonny Geller of Curtis Brown. Curtis Brown is frequently rumored to be about to start an operation similar to what Victor has announced. (In the US, by the way, agent Scott Waxman — a member of the DBW Conference Council and one of the original participants in our conversations about this — has created a publishing adjunct to his business called Diversion.) Our focus in that panel was not intended to be on the ethics of agents starting publishing companies, but now I think the topic is likely to arise.

Why? Because a third agent on the program that day, Peter Cox of Redhammer, has placed it front and center with a post he published yesterday called “Your Agent Should Not Be Your Publisher”. Peter is on a panel about “Innovation in Marketing and Business Practice.” He caught our attention because he’s been training his authors in digital marketing for years and because he told us he was thinking that the agent’s model had to change to handle fewer clients for a higher-than-standard percentage of the revenue. We didn’t ask Peter at the time how he felt about agents becoming publishers.

It turns out he is very firmly against it and is very clear and articulate about why he thinks that. The moderator of that panel is Richard Mollet of the Publishers Association. I’m sure his membership will very much want him to invite Cox to expand on his ideas. Cox’s panel takes place after Campbell’s but before Geller’s. The juxtaposition of the commentary across the panels will probably be of great interest to the audience and should make for some very interesting tweeting. Maybe we’ll need a special hashtag just for #agentsaspubs!

It was the fourth agent on the program that we thought was going to have the trickiest assignment. David Miller of Rogers, Coleridge and White Ltd. will be discussing “Territorial Rights and Open Markets” with Richard Charkin and Toby Mundy. Since the future of both practices depends very largely on what agents will agree to as the publishing landscape changes, I had thought David had the most politically challenging conversation of the group. It turns out that he’s excused from what will certainly be one of the most controversial aspects of the day’s discussions, although in our very open format, everybody’s free to say pretty much what they want. Perhaps Philip Jones, the moderator of that panel, will want to touch on this question with his panel as well.

It might be that at Publishers Launch Frankfurt we’ll stage this more directly as a debate (but that’s a crowded program and it might be hard to fit it in). You can bet it will be aired thoroughly at Digital Book World next January. And you can be pretty damn sure we’ll be generating some news on this topic (and others too, I’m sure) out of “A Global View of Digital Change”. If you’re in (London) town on June 21, you ought to be there.

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Sometimes something seems very obvious to me, but other people — smart people I respect — don’t see it that way and it makes me wonder if I’m missing something.

What I’m thinking about that way today is the future of “open territories” in the ebook world.

When English-language rights are sold to US and UK publishers, some territories outside the home markets are “closed” and others are kept “open.” Closed territories are reserved to the publisher who owns them; in open territories a US edition and a UK edition can both be legitimately sold.

For most of my career in publishing, Europe was an open market. Both the American and British editions of a book would be available there. Although currency fluctuations came and went and could temporarily change these things, most times the US edition carried a lower cover price (when converted to the local currency) but the UK editions were usually more widely available. Sales reps from the UK tended to call on the once-small but persistently growing number of bookstores that carry English-language books. British publishers had warehouses that were closer, shipping costs that were lower, lead times that were shorter, and customer service groups that were more comfortable dealing with Europeans.

With the coming of the EU, British publishing has moved to formalize and make contractual what was previously just their natural advantage. British publishers pointed to the fact that once an American edition was sold in Europe, EU rules would allow its importation into the UK itself! So unless the European market were closed to US editions, Britain itself was not closed to US editions. And that, quite naturally, was not a situation that British publishing could accept.

Of course, for an American edition to wind up on a British shelf would require two trips across the water: one from a US warehouse to Europe and then another from Europe to the UK. It might seem that this double-shipping would wipe out any presumed US pricing advantage, and I don’t recall any evidence of US-published imports showing up in any number. Nonetheless, for the past several years, UK publishers have succeeded frequently, if not universally, in excluding the American editions from Europe.

As with all things in publishing this subject is being revisited as publishing adjusts to ebooks.

As we know, the ebook market started to take off in the US in late 2007 and has grown to be a solid double-digit percentage of publishers’ sales with much higher numbers, often 50% or more, of the units sold in the opening weeks for major titles. In the past few months, British ebooks have started on a similar, perhaps even more accelerated, growth trajectory. So ebook revenue is squarely on the radar screen of the English-language publishers who are increasingly cognizant of English’s position as the world’s leading second language. Nowhere is this effect more evident or the future sales expectations greater than in Europe.

Right now, the European ebook market is still miniscule. Germany, one of the countries with the most advanced local-language digital infrastructures, recently reported ebook sales of one-half of one percent of the market. But it is not uncommon for German bookshops to see double-digit sales percentages of English-language books in their shops so we know there’s an English-language market there. English-language publishers, with the experience of explosive growth in their home markets under their belts, have good reason to expect the same thing to happen in Europe and for them to be among the principal beneficiaries.

But there’s a problem. Or, at least, I think there’s a problem.

The open-market competition for print books is waged primarily around service. The reps that call on the stores tend to take business away from the companies that call less often. The advantages of proximity and familiarity favor the British; sometimes the advantage of price can favor the Americans. But no trade publisher in either country tries to create cheaper, locally-priced editions of trade books for the European market.

In the ebook market, the competitive factors that prevail in print are moot. If a store sets up to sell ebooks, it will list every one in the catalogs it offers. As the ebook market matures, that will mean that, if the territory is open, both the UK and US editions will be available to the consumer. And with no other basis on which to make the decision of which to buy, the customer will almost certainly choose the ebook edition with the lowest price.

The logic of this seems inexorable to me. As the market grows, as the publishers become more aware of it, and as the consumers learn more about what is on offer, offering a lower price will be the only effective way to grow share in an open territory. This is damaging to everybody except the ebook consumer, who will get windfall price cuts. The publishers will gain share, but lose revenues. The authors, operating on a piece of the sale price, will lose revenues. And the lower prices for these English-language ebooks will further erode local-language sales and further undercut brick bookstores.

(European bookstores are extremely vulnerable to sales erosion as the market shifts to digital because the English-language selection they offer will look increasingly paltry compared to what will be available online.)

But some very smart agents seem to see something different from what I see. At our “eBooks Go Global” conference at BEA last week, Simon Lipskar of Writers House specifically declined to insist on closed markets and celebrated the virtues of “competition” on behalf of his writers. In another BEA session, Stephanie Abou at Foundry was quoted by one reporter saying “our goal to get authors the best shot at being published the best way. what that means is we have this fight to keep Europe non-exclusive.”

Of course, timing is everything in life and in dealmaking. There really is no European market for ebooks to speak of yet. There are structural impediments to growth. A panel including Google, Kobo, Ingram, and OverDrive at “eBooks Go Global” spelled out some of the complex local compliance issues that make it take time to set up a store in each new country. My concern about a “race to the bottom” assumes a much more developed market than we have today, with both US and UK editions made ubiquitously available in a European ebook market that resembles what we’re seeing today in the UK, if not in the US. That may be two years away, or even more.

So maybe Simon and Stephanie do see what I see but they might also see it as far enough away not to be relevant yet for deals they’re making now. But maybe our difference is more fundamental. They both referenced “competition” in expressing support for open territories. It is precisely my concern about the effects of price competition that it seems to me they’re ignoring.

It feels to me like I must be missing something somewhere. Not only do I think the agents should be moving to close markets in the interests of their clients, I think publishers in both New York and London should be moving to close markets because they’ll ultimately make no money on the books for which the markets are open. I’d say it is better to control a closed market for half your list (or even a third of it!) than have an open market for all of it.

This subject is of great interest in the US but it is existential in the UK. Sales made in Europe are already critical to UK-based publishers, on titles where Europe is open as well as on titles where they control it contractually. Since UK publishers are already trying to close the market in their favor for print, one can hardly expect them to be less zealous about closing it for digital books. But their leverage to close Europe, for digital or print, is primarily based on their ability to sell print in the UK. Those are the sales they can make that nobody else can. And those are the sales that finance serious advances that nobody else will pay.

But will that leverage vanish as bookstores diminish and the sales of print become less important?

The panel that will explore this subject at our “Global Perspective on Digital Change” conference in London on June 21 will be my next chance to be enlightened on this subject and shown the flaw in my thinking if open territories for ebooks are not a race to the bottom. We’ll have publishing CEOs Richard Charkin of Bloomsbury and Toby Mundy of Atlantic Books and agent David Miller of Rogers, Coleridge and White discussing this topic with Philip Jones of Future Book moderating. I’m sure this panel, along with many others on that day, will be opening some minds. Mine is lined up to be among them.

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The first Publishers Launch Conferences show outside the United States, “A Global Perspective on Digital Change”, will be at the Congress Centre in central London on June 21, with the Publishers Association serving as our partners in putting on the event. We also owe special thanks to the PA’s group of Digital Directors, who were extremely generous with their time and insight. If you can be in London that day, you couldn’t find a better way to spend it than with us.

We’re still putting the finishing touches on what will be a one-day conference packed with illuminating conversation, but we can tell you quite a bit about it already. We aim to deliver strategic, practical, and focused discussion of near-term issues and opportunities. This won’t be a showcase for cool products or a venue to debate what the future might look like some day. We’re examining essential issues — ebook “export” opportunities; what happens to territorial rights; hiring and retraining to meet today’s challenges; revamping publishing systems for a dual print and digital paradigm; getting “found” on digital shelves — that publishing professionals should focus on now to thrive in the days to come.

The UK market is in between the US and the rest of the world in its migration from print to digital reading. Kindle and iPad sales really took off last Christmas and, while ebook penetration may be a fourth or less of what it is in the US, it has grown enough to be disruptive and to generate a consensus acceptance that very substantial change in the industry is inevitable.

On the one hand, my PLC partner Michael Cader and I have followed the developments in the US very closely so we have some firsthand experience with some aspects of what the UK trade is going through. On the other hand, we know history won’t repeat itself precisely. There are important differences in the markets and there is a substantial group of companies with experience and capabilities developed in the North American market that can hit the ground running in Britain or anywhere else in the world. That alone will make everybody else’s experience different than what happened in the US.

In order to be sure we were talking with the UK industry, not at it, we took some preparatory steps. In February, we put a large number of ideas for panels and topics up on Survey Monkey and invited 70 players in the UK book trade to express their opinions on them. In five days, 40 of the people responded.

Then we followed up by spending three days in London meeting with about 50 people to discuss our ideas and theirs. Our partners at the PA provided invaluable assistance, hosting our conversations and inviting us to join a regular meeting of the Digital Directors to get the insights of the most knowledgable people in the UK market. Those conversations were crucial in helping us focus properly on topics and in locating some key sources of insight. Frankly, despite our long experience working with the British publishing community (I have visited London on business three or four times a year for 35 years), putting this conference together would have been impossible without the help we got.

But because of that help, I think we’ll be presenting the UK publishing community with a lot of very useful discussion that hasn’t taken place at the many prior gatherings that have discussed book publishers and digital change.

One topic that we identified very early is the opportunity we see for publishers in Britain and Ireland to sell into the US market now without payng for a distributor infrastructure or taking an inventory risk. When we started to explore this topic, we learned that, of course, people are definitely starting to plan for it. Some are starting to exploit it. This was something we thought should be happening below the radar, and it is.

This is a peculiar opportunity, because it might be more important for independent UK publishers large and small than it is for the biggest global players. We’re still filling out the panel for this one, but we have Helen Kogan of Kogan Page, an independent whose company was already working in the US market (and therefore has some helpful experience to pass along) but who is seeing the expanded opportunity presented by digital, and Jean Harrington of Maverick House Publishers in Dublin. Jean is also President of Publishing Ireland and we invited her to join this particular conversation for a reason. The Irish diaspora in the US has a particularly strong identity with the old country and we expect books of Irish history and Irish fiction will find a substantial additional market through ebook sales in America.

We’re working on adding another British publisher and an agent to that dialogue.

Another topic arose out of a conversation that longtime UK consultant Mark Bide and I had while we were at Tools of Change in New York in February. How long will it be, I wondered, before half of UK sales are digital? Mark said he wasn’t sure about the timing, but he was sure that the publishers’ systems, overhead allocations, staffing, and infrastructure would require a lot of adjustment to be ready for that day. That’s a good conference topic, we thought.

Then, in our conversations at the PA 10 weeks ago, Anthony Forbes Watson, the MD of Pan Macmillan, told us he had charged his team with thinking through the question exactly as we had defined it. Anthony wants to know “what does 50% ebooks look like? What do we have to do to be ready for it?” The next day we talked to James Long of Pan Mac who told us that, yes, he was actually the person in the company with the primary responsibility for thinking this question through.

We decided the best frame for this conversation was “thinking about the future.” James, as he will tell us on June 21, is largely focused on what Pan Mac needs to do in systems development and integration, workflow changes, and skills development to be ready for a 50% digital world.

But there are two other aspects of preparing for the future we felt could be illuminated by other panelists we recruited.

Perseus, a US company whose Constellation division that provides digital services to smaller publishers is a global sponsor of Publishers Launch Conferences, is one of several companies in the world (Ingram in the US is another; so might Random House be in the US and the UK) that are investing in warehouses and print book distribution capabilities at precisely the time many publishers are disinvesting in them, precisely because they know that most publishers will have to disinvest in them. They’re trying to be there for publishers who want to dispose of fixed cost overheads for the shrinking print book market. We put Rick Joyce of Perseus into this conversation to cover the sensitive topic of consolidation on the physical side (a subject that Dominic Myers, the MD of Waterstone’s, famously put on the UK publishing community’s agenda a couple of months ago.)

Copyright Clearance Center, the US RRO which is also a global sponsor of Publishers Launch Conferences, has steadily called our attention to another industry-wide challenge: the need to manage rights more effectively and on a more granular level to take advantage of emerging opportunities to license chunks and fragments for apps, ebooks, and web sites. We thought that the voice for this topic in London should be local, and we were pleased that Sara Faulder, head of the Publishers Licensing Society, agreed to join this conversation.

Mark Bide has agreed to moderate this group in what I think will be a dialogue about publishers and the digital future unlike any the audience will have heard before. (Except, that is, if they are at our Publishers Launch BEA show on May 25, where we’ll have a different version of this conversation, one more focused on export and rights sales than infrastructure, but also covering the change we’ll see to selling more and more fragments.)

We’re not above stealing our own ideas and giving them a local spin. One panel that was extraordinarily successful at Digital Book World last January was one we describe in shorthand as “new skill sets”. It’s about capabilities publishers need to get that they don’t have and it is about process and workflow changes and the use of cross-functional teams as well as hiring in or training people with new skills. Charlie Redmayne of HarperCollins did that panel for us in New York in January and is reprising it at our BEA show. In London, he’ll be joined by Juan Lopez-Valcarel of Pearson and Jacks Thomas, the CEO of Midas Public Relations, on a panel moderated by Jo Howard of Mosaic Search & Selection Ltd. One of the key elements in the New York discussion of this, which we expect will arise again in London, is “when is it best to hire in the skills and when is it better to retrain the people I already have?” This is a subject every publisher needs to be thinking about that isn’t discussed in public very often.

We’ll have three of the top digital leaders of UK houses — George Walkley of Hachette, David Roth-ey of HarperCollins, and Sara Lloyd of Pan Macmillan — joining Michael and me for a dialogue about the big companies who have cut their teeth on the US market and are now taking their capabilities worldwide, starting in the UK. We’ll be talking about Amazon, Apple, Google, Kobo, Ingram, and Overdrive (the six clearly-declared and clearly-capable global ebook players) as well as Sony, aspirants like Copia and Blio, and US titan Barnes & Noble (which has shown no clear signs of global interest yet.) It looks to us like there is only one UK player with a global perspective, still-tiny cell phone provider Mobcast, but we’ll be learning from our panelists whether there are others we should be considering. And our audience will learn more about the North American companies which are bound to be a big part of the local market’s ebook life in the years to come.

We’ve reached a time when “metadata” is an important subject to discuss, no matter how dry or back room it has seemed. We were fortunate to get Graham Bell of EDItEUR to moderate a dialogue about this for us. He’s recruited Jon Windus of Nielsen and Karina Luke of Penguin to discuss it with him. We’re now looking for a retailer to join them. The condition of metadata in the marketplace is not good enough in enough places yet. This is costing publishers sales. This panel will explain why that is and what every publisher should do to make sure this isn’t a huge hole in the side of their boat as online sales, print and digital, grow and the impact of metadata grows right along with them.

We are also going to have a discussion of the future of territorial rights. Richard Charkin of Bloomsbury, a well-known skeptic about them, and David Miller, an agent with Rogers, Coleridge and White Ltd., have agreed to participate. We’re looking for a full-throated defender of the current territorial regime to join them in what will be more of a conversation than a debate. We wonder whether territorial rights make as much sense in a 50% ebook world as they do in the 5% ebook world we might now be in. The agent’s voice in this conversation might be the most important one because, after all, they decide whether the deals are acceptable or not.

One thing that the territorial rights dialogue will certainly entertain is what we should expect to see in terms of author initiatives. That topic is bound to come up in two other discussions as well. There’s one we’re now calling “experiments, best practices, and out of the box thinking” which is really about innovation. But we are going to focus on innovation in business models and practices and innovation in marketing, not on product innovation. We are still working on putting this group together, but we were very impressed with our preliminary conversations with two of the panelists.

Marc Gascoigne is at Angry Robot, a sci-fi imprint started by HarperCollins and then bought by Osprey. Angry Robot’s better mousetrap is its community focus; Gascoigne will make the case that doing that right (which many publishers say they want to do) requires that everybody, and that means every editor and everybody else, communicate directly with the audience. It is hard to see putting that across in many established trade houses.

Richard Mollet of the PA will moderate the conversation with the innovators.

Also on that panel will be Peter Cox, an agent with Redhammer. Cox is changing his own business model (providing more in the way of services to his authors, but charging them more for it and looking to represent fewer authors, not more) but he’s effectively changing the author-publisher relationship as well by making the author an active marketer and community gatherer. He’ll have examples and he’ll have ideas that will challenge the thinking of many publishers and agents in the audience.

The last panel of our day is intended as a Grand Finale. Michael Cader and I will sit with Stephen Page of Faber, Rebecca Smart of Osprey, John Makinson of Penguin, and agent Jonny Geller of Curtis Brown. We’ll get their take on the speed of the ebook takeup and its consequences.

How will British publishers cope in a market that may soon have no full-line bookstore chain? How will the industry cope with the rise of self-publishing? Is there any real danger of a consolidated English-language world in which London becomes subsidiary to New York? Or, in some companies, might it be vice-versa? Will both agents and publishers be changing the core business models which have prevailed for the past century over the next few years?

What excites me about the last panel — aside from the sheer smarts and savvy of the people we got to join us — is the diversity of their perspectives. The publishers run companies of different sizes and with very different approaches to building their publishing lists. The agent joining us has gained a reputation as one of the most digitally savvy players in the UK market. Michael and I thrive on spirited conversations with very smart people; we think we’re going to finish the day very stimulated and with big smiles on our faces.

And we think our audience will too.

Of course, before we get to London, we’ll be running our “eBooks Go Global” show aimed at international visitors and their trading partners at BEA. At that show, we’re particularly excited about two panels we won’t be doing in London. One is with a few booksellers already working with the new Google Ebooks capability reporting on how it is functioning for them. The other takes a slightly different approach to the “selling in the US” opportunity. Patricia Arancibia of Barnes & Noble, which has aggregated about ten times as many ebooks in Spanish as most people in Spanish markets will tell you exists, will open a lot of foreign publishers’ eyes to the possibilities that exist for them in the US market. We’ll also have a chat with Barry Eisler, the author who turned down half-a-million bucks to self-publish. And that’s not all. Tickets still available… And tickets still available for London as well.

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From the beginning of Digital Change Thinking Time, which for me goes back to the mid-1990s, “subscription” has been high on the list of future expectations. That’s natural. The subscription model has emerged as the dominant one for cable TV (although there is still some pay-per-use) and Netflix works that way as well. Lots of people subscribe to satellite radio. Rhapsody is a successful subscription service for music. Pandora for music has a free model and a paid model, as does Spotify.

Subscriptions actually have a history in trade publishing too, where they were called “book clubs”. The print book club model, which also depended heavily on the club’s role in curation (or title selection), was doomed by the arrival of online bookselling. But O’Reilly has demonstrated the common sense (and worked out the mechanics) of a subscription model for ebooks with their wildly successful Safari program for the past several years.

In the past week, Publishing Perspectives offered up a thoughtful piece by Javier Celaya speculating on a free subscription, ad-supported model for ebooks like Spotify is for the music business. PP’s editor, Ed Nawotka extended the speculation to a model of piecework sales: buying a book in chunks or chapters.

Neither of those is what I have in mind. This piece by John Konczal, building on what’s being done in the textbook business, comes closer.

We’ve reached the point where Amazon with their Kindle and B&N with their Nook are perfectly positioned to make a subscription offer. Publishers will have mixed feelings about it and the agents for the top-selling authors have good reasons to be against it, but the proposition seems (to me) to be one that will be compelling to many consumers and will offer tremendous advantages to the retailer that offers it. In fact, I’m a bit surprised it hasn’t happened already.

Here’s how I imagine it working.

The retailer creates a pool of content that will be offered through the subscription service. The proposition to the consumer will be that for a price (let’s say: $50 a month), they can read all they want from the content pool. In turn, the retailer divides 70% of that money (or 75% or 80%) among the publishers in proportion to how many “pages” (a somewhat arbitrary but internally consistent measure) of their material have been read. Of course, all available public domain content will be in the pool.

I am guessing that a very high proportion of the owners of self-published and small press books will find the proposition attractive from the beginning. How the big publishers would react is less certain. My belief is that the smart ones will try it: put in some titles, perhaps from their deep backlist, to get some visibility as to how the program would work.

Meanwhile, the consumers who do this will determine the course of events from there. It seems possible that the impact of this offer will be similar to the impact of the e-ink readers: the heaviest book consumers will see the greatest financial merit in the proposition. And just like customers for Amazon Prime (one annual fee for shipping) and Kindle or Nook owners are highly resistant to buying outside those programs, customers for this subscription service would largely be lost to other book consumption. It will take a more powerful desire to read any one particular book to make it a purchase outside the subscription than it takes to buy it now.

So that, in turn, will drive more books into the program. Authors, and therefore their agents, won’t want to be left out. The early entrants to the program will reap a relative bonanza because they’re on a shelf with less competition which will drive further expansion of the title base.

The tricky part here is setting the right price. As I was thinking about this piece, a reader pointed out a conversation on the Internet about this subject from a different perspective. Here the question was: “what would you pay to read any book anytime you want?” The bidding seemed to begin at about $100 a month. That strikes me as high, particularly since the pool of titles would certainly lack most high-profile books, at least in the beginning.

But a retailer setting the price too low could cost itself a lot of money. Lots of heavy readers spend more than $40 or $50 a month buying books now and, of course, they’d be the first ones to enter such a program (to save money). The benefit for the retailer would be that those customers would be “locked in” to the service, not buying anything elsewhere.

Of course, this idea runs totally afoul of agency pricing. The publishers who are using agency will have the hardest time even experimenting with such a subscription program. On the other hand, if the subscriber base becomes large enough, it will force some reconsideration.

There are all sorts of wrinkles one can imagine beyond this initial idea. There could be a “premium” subscription that had the higher-profile books, creating a more robust revenue pool for them. There could be “vertical” subscriptions for genres or topics. There could be a special discount for subscribers to purchase books not in the pool (except for agency books, of course, whose terms would not allow it.) And a company like Harlequin or a sci-fi imprint of a major house could create their own in-house pool that might attract subscribers. (In fact, the innovative small sci-fi publisher, Baen Books, already has a subscription service!)

But with ebook consumption now climbing rapidly toward half or more of the sales for many titles, it seems inevitable that models that won’t require a transaction for each and every book must emerge. I’d be a bit amazed if conversations about an idea like this, or something like it, aren’t taking place inside the biggest ebook retail shops already.

We created a “thinking about the future” panel for both of our upcoming Publishers Launch shows. They will entertain the subscription question, among other issues, with an eye to the special complexities of international implementation. At our eBooks Go Global show aimed at international visitors and their trading partners at BEA, the panel will feature Tracey Armstrong, the CEO of Copyright Clearance Center; publishers Ricky Cavallero of Mondadori and Cyrus Kharadi of Random House; and agent Simon Lipskar of Writers House. This panel of four incredibly sharp and thoughtful people, moderated by Ed Nawotka, the editor of Publishing Perspectives, represents a real diversity of viewpoints and will explore the practical barriers to this and other innovations across international markets.

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The fact that Publishers Launch Conferences will stage half-a-dozen or more events before our next big multi-day Digital Book World blowout next January doesn’t change the DBW calendar. Now is the time of year when we have to start thinking about what the big issues will be at the turn of the year so we can start planning the program. As we did last year, we’ll be calling a meeting of our Conference Council (the 2012 group is currently in formation) at the end of June to brainstorm the topics and our approach to covering them.

It’s my job to anticipate now where we’ll be in nine months. What aspects of digital change will be most important to us when we convene again at the New York Sheraton and have a couple dozen sessions to explore the issues? This post exposes the current state of my thinking on the subject; I am shamelessly using the opportunity to engage the very smart audience gathered here to help me refine these thoughts and point out what I may have missed. I count 15 discrete subjects here (some of which can certainly be combined) which have made my list so far. (I’ve italicized them so you can count along with me; they don’t all get their own paragraph.)

The biggest subject of all, of course, is “global.” The reality that every publisher anywhere is now able to reach any reader everywhere with no local presence, no inventory barriers, and many of the same intermediaries that deliver content to local customers is an industry-changer that will take a long time to deliver its full effects. Territorial rights allocation is only one of the many long-time conventions of publishing that will be challenged by the reality of global. It looks like the biggest publishers — those with local organizations in many countries — have the biggest challenge to adjust to the new global reality. We see this now as we’re putting together panels for our BEA and London events on the first biggest opportunity of global: the new ease of selling books in any language and of any origin to the biggest ebook market developed so far: ours in the United States.

Perhaps the second biggest subject is one we’ve discussed in this space for a long time: “vertical.” Even the most avowedly “general” of the big “general trade” houses are beginning to recognize the urgency of direct contact with individual customers. Once that becomes an objective, it quickly becomes apparent that audiences cluster around subjects or genres: verticals. We anticipate some dramatic reorganizing of the imprint, publishing, and marketing structures of the major houses as they develop their audience-centricity. There might even be enough development along those lines to warrant conversation about it at DBW 2012.

Two more categories of change will be in the “sales models” and “product models” publishers will employ, neither of which have had anything but the most minor adjustments since the mass-market paperback became a force just after World War II. We’d expect somebody big to try a subscription model, a la O’Reilly’s Safari or what we get with cable TV, for the consumer market sometime soon, maybe before next January. (In fact, a James Patterson Book Club, which is a sort-of new subscription model, was announced just today!) And the new Amazon Singles program for shorter-than-book-length content is accelerating the awareness of publishers and authors that the length requirements for printed books do not extend to digital ones.

All of this will lead inexorably to more “ebook first” imprints, divisions, and initiatives. I’d guess that by January, several (if not all) of the major houses will have “programs” offering content for sale which is too brief to be delivered as a bound book. We first reported on a program of this kind from Harlequin at BISG’s Making Information Pay conference several years ago. It was an outlier then. It’s more of a pioneer now. This week we heard that Hachette has a short fiction program in its Orbit imprint. Last week in London we talked with friends at Pan Macmillan about a short ebook program they created at the end of last year to capitalize on the many Kindles and iPads that were delivered as presents for Christmas. (Of course, we’re putting that on the program for our London conference; the coordination challenges within an established operation to pull off something like this are not trivial.)

Part and parcel of verticality is direct audience contact and retention. When we wrote a couple of posts last summer about direct marketing techniques publishers had to make part of their standard operations, we were a bit early to get the true trade publishers’ attention. By next January, every publisher’s consumer emailing list will be a component of its marketing effort. A part of this work, of course, is effective use of social media, a subject publishers keep learning more about and which we’ll certainly try to cover — in our way, which is looking for scale and replicability — in January.

Metadata is a subject that just doesn’t go away. It is disappointing to hear from industry bodies and retailers that many publishers haven’t gotten the core metadata totally under control yet. We covered the basics at Digital Book World 2011; in 2012 I hope we’ll be talking about things like rationalizing the BIC (British) and BISG (US) subject codes, which have developed separately to address each market’s idiosyncrasies but which need to be harmonized to enable the full potential of globalization.

Over the next two years, I’m expecting the most disruptive change to take place in children’s book publishing and illustrated book publishing. When the catalyst for ereading was the Amazon Kindle, as it was starting in late 2007, straight text worked but not much else did. Now that Barnes & Noble’s Color Nook and the iPad are devices of choice for millions of people, illustrated material and rich color can be delivered as well as text. In the children’s book area, there have been a slew of new entrants, probably led by big publishing veteran Rick Richter’s Ruckus Media. The illustrated book business hasn’t really surfaced in a big way yet, but it almost certainly will by next January’s Digital Book World. I’d expect it to be a major topic of conversation since illustrated books are far more complex to “convert” and present the opportunity to enhance in ways that may soon become requirements.

The recent news from O’Reilly that they are using Ingram’s services to be able to deliver printed books without holding stock signals another new topic that will be of widespread interest: building a virtual inventory infrastructure. This topic also came up in a discussion at London Book Fair with Sara Lloyd and James Long of Pan Macmillan, one company we’ve found that is very consciously preparing for a 50% ebook world. Decentralizing their print production to reduce inventory and manufacture closer to the point of delivery is very much on their radar screen. (In fact, the whole question of how publishers have to adjust their organizations and overheads to cope with a 50% or more digital book marketplace is one we’re featuring at our Publishers Launch show in London.)

As I write this, it has been nearly a month since we’ve had a lot of conversation about authors doing their own publishing, but we got very familiar with the names Amanda Hocking, John Locke, and Barry Eisler in recent weeks because they’re doing just that. That trend can do nothing but accelerate between now and next January.

This is requiring agents to reconsider their own business models. We’re at the dawn of an era where agents will be publishers themselves and business advisors, not wholly dependent for their revenue on their ability to get advances and royalties from publishers. The first Digital Book World conference in 2010 was the first digital publishing conference to feature agents prominently in the conversation and we talked then about how business models might change. This January I expect we’ll be able to stage some conversation about how new models are working out for those who have tried them. (One of the agents we’ve put on the program at DBW is Scott Waxman, and his Diversion division doing ebooks has 20 books in the market and 10 more about to hit.)

And the last two subjects that we almost certainly should be discussing at DBW 2012 are the still-critical but diminishing segments of a publisher’s marketplace for printed books: brick-and-mortar retail locations, particularly bookstores and mass-merchants and the place so many people have discovered and acquired their reading material, the public library.

The decline of bookstores has been duly noted in The Shatzkin Files and, of course, the bankruptcy of Borders has everybody’s attention. Less well-publicized has been the decline of book sales in the mass merchants. (Tactics for arresting that slide will be the topic of a presentation by Tara Catogge of Charles Levy at BISG’s Making Information Pay conference, another one we get our hands dirty on, taking place on May 5.) As the brick channel for printed books continues its inevitable decline into insignificance, the state of play and the tactics to adjust to the loss of sales and, perhaps more important, merchandising exposure, will be a topic we’ll discuss again, as we did with independent bookstores and heads of sales departments last January.

And how to deal with libraries in the ebook world is a question vexing many publishers. Two of the Big Six just don’t sell them ebooks at all; one company has tried a number-of-loans limitation. We are intrigued by a solution pioneered by Bloomsbury in the UK — a “shelf” of books the library licenses a year at a time for online reading only. We aren’t covering it in our London show because we think most of the UK market is familiar with it but we’ll be putting it on the agenda for Digital Book World next January.

Next week I’ll give you a preview of the first two Publishers Launch Conferences programs: for international visitors to BEA and the Americans who work with them (on May 25) and, with the Publishers Association, our program for UK publishers (on June 21.)

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I spoke last week to a group in Montreal convened by the English-language Publishers of Quebec and the Quebec Writers Association in a small auditorium at the Atwater Library. The Atwater Library is a private library with very limited government funding which is more than 100 years old. (The Globe and Mail article that quoted me says it dates from 1828.) It occupies a nostalgia-provoking building on a downtown corner across from a small park and a long slapshot away from the site of the no-longer-present Montreal Forum, where the Canadiens played for many years (and where I was fortunate enough to see a game once in 1958.)

The topic of the talk was whatever I wanted it to be so I riffed on what I think are the two big themes of digital change in publishing: vertical and global. Readers of this blog have seen material on both. Vertical refers to subject-specificity, or, if you prefer, audience-specificity. I posit that publishing across subjects — as all the biggest consumer publishers do — is made possible by bookstores, who sort the books onto shelves that make sense to customers.

An important component of the “vertical” argument is the inevitable decline of bookstores. What leads to that is the inexorable movement of customers from shopping in stores to shopping online, combined with the “critical mass” requirement for a bookstore. Some people say a bookstore will close if it loses 10% of its business; I usually say 15%. Obviously, it varies with the store. Just as obviously, a store doesn’t need to lose all its business, or even half of it, before it would be economically unviable and forced to close.

As stores close, shopping in them becomes less convenient. As the remaining stores cut back on the shelf space they can devote to books, they become less attractive. All this drives more and more people to buy print online or to switch to ebooks.

Since the single most critical skill set for consumer publishers for the past 100 years has been being able to put books on bookstore shelves, this is a frightening development for any trade publisher paying attention.

The global trend is more encouraging for people in publishing today and it is particularly more cheerful for publishers in small countries who deliver content in big languages. That means Canadian publishers in both English and French should benefit enormously as the ebook infrastructure builds out and puts them closer to customers all over the world.

Partly because we were in a library and partly because somebody asked, I also ruminated about the future of libraries. The Toronto Globe & Mail reported it this way:

And libraries? “Libraries make no sense in the future,” Shatzkin said on stage in a library that dates back to 1828. Anyone with Internet access already has access to far more books than were in that library, he pointed out. “There is no need for a building.” There will be an ongoing need for librarians, however; their skills will continue to be in demand, as will those of editors.

This quote, which was really off-hand, is clearly annoying a lot of people. So I thought it would be worth devoting a post to the subject of the future of libraries.

First of all, the key word is “future.” I find myself making the point repeatedly that the infrastructure for printed book creation and distribution has had mostly organic change for about 100 years now. It’s a well-developed capability. Publishers know how to make printed books well and efficiently; they know how to find and serve the customers for them. They know how to print them at scale and, over the last dozen years or so, 1-at-a-time. The special requirements that libraries have to prepare books for shelving are met seamlessly by Ingram and Baker & Taylor.

The print book infrastructure is like a network of roads, sidewalks, and superhighways. Everything gets where it wants to go by well-established paths.

Ebooks live in a different world. There are no superhighways and, for many books and many markets, there isn’t even a beaten path yet. We’re still hacking our way through the jungle. So, for the most part, the world we’ll live in when there is a fully-built ebook infrastructure only exists in our imagination today.

The world I was describing in the quoted and paraphrased section of my talk is imaginary. It is expected (at least by me), but it isn’t here yet and I wasn’t trying to suggest that it is.

In a fully ebooked world, which I expect we’ll be living in 10 or 15 years from now, print books won’t be extinct, but they’ll be either exotic or very purpose-driven. They won’t be common or an ordinary way to deliver content, the way they are today.

I also expect a world where all of us will have access to, or personal ownership of, many screens. Through those screens, we’ll also have access to a variety of content that is suggested by what the Internet can deliver us today. My hunch is that, by then, our “basic Internet” (think “basic cable”) subscription will include access to more books than exist in most libraries today, with shedloads of others available for usually nominal and occasionally substantial additional fees. We may have to choose a screen (or two) to carry with us when we leave our house in the morning (or not — there will be screens to borrow at Starbucks and the hotel lobby and the waiting room at your dentist), but we’ll have access to content for it (or them) wherever we are and at any time. Since the same screen will deliver us our tools for personal productivity (the blog post I’m working on, the shopping list for the cheese store on the way home), probably connect us to our money, and, of course, contain our calendar and directions to the party we’re supposed to go to this evening, carrying additional “stuff” — whether a book, a magazine, a newspaper, or a notepad — will be a long-discarded anachronism.

The core purpose — the founding purpose — of a library, around which other things have grown, is to deliver access to printed words. Even the smallest local library almost certainly had more content housed within it than any individual had in their home and, in most cases, far more content than would be available at any local store. It was the books in the library that initially defined the library and attracted a core of patrons to it. When all of us have access to more books on our screens than are in the library, what’s the point to the library?

At least, that’s what I was thinking.

The very thoughtful Gary Price, who is a library and information professional who has spent far more time considering libraries this or any other week than I have in my lifetime, posted his ruminations on this subject, triggered by the paragraph in the Globe and Mail but going way beyond them. Gary raises some good points worthy of response (about which he has posted additional thoughts since I saw and wrote about them.)

He wonders what kind of libraries I’m talking about. Simple answer: consumer libraries. Libraries that serve a professional constituency — academic or otherwise — are outside the scope of these predictions.

Gary observes that statistics show that libraries are being used more than ever. I don’t doubt that but it doesn’t undercut my belief about where things will be in 10 or 15 years. Newspapers had record years for profits in the mid-1990s.

Gary observes that many people use the library for more than books, specifically citing their mission in providing technology education and to provide Internet access, and making the point that not everybody has access to the computer and the Internet at home. In my opinion, all these objections will be almost entirely mooted in the next 10 or 15 years.

(A parenthetical point. In the US, at least, the poor will almost certainly always be with us. People will be left behind by change; our country routinely permits that. I’m a liberal Democrat; that’s not an aspect of America that makes me happy. Libraries will vanish faster than the need for them does. I predict what I believe will happen, not what I want to happen.)

He points out that there are special collections, archives, and other materials found in library buildings and that they, as well as some books, might not be digitized anytime soon. Perhaps true, although a lot less true in 10 or 15 years. But what percentage of today’s libraries would that kind of material keep open? Particularly if we’re talking about libraries for consumers? A small percentage, I’d warrant.

As others have, Gary points to the community events that take place in a library as a counter to my argument. I don’t think it is. I didn’t say community centers would cease to exist. There are many community centers that aren’t libraries. The fact that it is convenient and sensible for a town to use its local library building for other purposes doesn’t mean they need to keep the library to serve those other purposes. In fact, there will be lots of empty former retail storefronts to use as community centers all over America in 10 or 15 years.

One of the people at the Atwater in Montreal told me that they are reducing their shelf space for books (like a lot of bookstores, I might add.) If we get to the day when the store is still called Barnes & Noble and it has one shelf of books and is otherwise full of stationery, plush toys, and reading gadgets, is it still a bookstore? If the Atwater converts itself over time into a commmunity center with one room that has some books in it, will it still be a library?

I don’t think so. Others may disagree, but I would call that a semantic argument, not a substantive one.

Gary’s last point, which has nothing to do with anything I said, is to ponder what happens to the books and other materials in a library if the library shuts down. He hopes they don’t end up in a dumpster. I take no position on that (if they have value at the time, they won’t), but I would point out that many libraries today, unlike the situation a few years ago, won’t take your contribution of books when you clean your shelves at home. They have no place to put them and many, like Atwater, have less space for books, not more. I know libraries try to hold used book sales to make money, but I imagine we’re going to find that libraries will be causing books to be destroyed in the future, from necessity.

I did make the point in Montreal, which the Globe and Mail picked up and Gary applauded, that librarianship will be needed by people long after buildings full of books are not. That’s going to require an entirely new business model that hasn’t been invented yet. Consider that part of the paved infrastructure that we’ll have in a decade or so, but can only exist in our imaginations at the moment.

How about writing a whole post about libraries and not mentioning the HarperCollins limitation on ebook lending? Maybe another day…

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