Global

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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I had already been in the “publishing futurist” game for a few years when my frequent project partner Mark Bide and I put together a day-long conference in March 2000 at the London Book Fair called “Publishing 2010.” (As I look at what I wrote for that conference, I can see some things I got right, some I got wrong, and some look like good predictions for the next few years, but haven’t happened yet.)

Although it was an “innovation” when I included agents in the digital change conversation at Digital Book World in January 2010, Mark and I actually did it for the first time at that conference 11 years ago. One of the agents we recruited for this conference was Michael Carlisle. Just a week before the conference, and the day before I was leaving for the UK, Carlisle called me with bad news. One of his literary clients was the driver of Lady Diana Spencer’s car in the crash that killed her in August of 1997. The driver’s book was coming out, Carlisle represented it. The promotional book tour needed to take place during the week of London Book Fair and Carlisle just had to cancel his trip across the pond.

“But,” he said, “I can give you a replacement. I know you don’t know him, but his name is Michael Cader and I can assure you he’ll do a great job as my substitute.” With no time to find somebody else, or even to vet this fellow Cader, I just said thank you and good luck with the book tour.

The conference was a success. We made a little money, had a very provocative day of conversation, and a few people even told me it was the best such conference they’d ever attended. Cader was, for my money, one of the stars of the show. I hadn’t ever heard anybody say so many things about digital change in publishing that I agreed with but hadn’t really thought of before. It was easy to agree that we should stay in touch.

A month or two later, Michael sent me a prototype for an idea he had and was about to start: a newsletter called Publishers Lunch. It was a great concept: links to stories about publishing from all over the internet with a graf or two of summary, explanation, and comment. I was bound to think this was a great idea because I’d had a similar thought about six or seven years earlier, just before the Web changed all of our lives. I had suggested to my friend (and one of my very favorite people to work with) Lorraine Shanley of Market Partners that the publishing world needed a service. Since a story about publishing could appear in any one of several newspapers or magazines on a New York newsstand on any day, we should hire a kid to read the papers at 3 am and send out a FAX at 6 in the morning telling people what stories they shouldn’t miss!

We didn’t do it. Cader’s version, with the advancements of technology, was an infinitely better iteration of the idea. As it turned out, his ongoing commentary also added more value than we could possibly have added (unless, of course, we had his help, but we didn’t know him then!)

In the decade-plus since that London Book Fair and the start of Lunch, Cader and I have had the opportunity to work together from time to time on conferences and industry events. We’ve shared stages. At the last BEA in Washington a few years ago, I interviewed Michael in a 1-on-1 session. And we have endlessly discussed our views about publishing and digital change.

We are both, in different ways, already making our living delivering “industry education.” For public consumption, Michael delivers each day’s facts with a few words of wise context; my less-frequent Shatzkin Files posts select a context or a paradigm to explain with, usually, some supporting facts. The consulting assignments of my company often involve teaching a tech company about the publishing business or helping an industry service get a better handle on what their client base needs or can accept. We’ve talked about ways to formalize a partnership over the years. Before it disappeared, we talked with the Stanford Publishing Course about delivering a new digital curriculum. We’ve fiddled with live event ideas.

When David Nussbaum, the Chairman of F+W Media, came to me two years ago with his concept for a new conference called Digital Book World and asked me to organize the program, I suggested strongly to him that he figure out how to engage Cader as his marketing arm. David agreed, and for the past two years, Michael and I have happily collaborated on programming and promoting a 2-day event which, in two short years, has grown to the same size as the 5-year old, very successful, and very worthy Tools of Change.

Today, Michael and I have announced a formal partnership called Publishers Launch Conferences to deliver live events — globally and throughout the year — on publishing and digital change. It is an anchor of this business that we will continue to do the 2-day Digital Book World event in January 2012 and for years thereafter. We call Digital Book World a “State of Play” event, covering the landscape of digital change.

DBW is aimed primarily at US trade publishers and the extent of the show — 2 days and 4 parallel programming tracks for half of the time — allows us to cover more than two dozen distinct topics with panels and presentations. Publishers Launch Conferences will, in its first year (ending next January with DBW 3), deliver about seven shorter (1 day or 1/2 day) and more focused events in New York, London, Frankfurt, and San Francisco. Our first day-long conference will be at (and in conjunction with) BookExpo America in May, aimed at international visitors and the Americans who are doing business with them. Our event in London on June 21, being presented in partnership with the UK’s Publishers Association, will address digital change from a UK perspective.

It has already been an education for us to think things through from the point of view of the different audiences we’re delivering for. Our plans for our London show were greatly informed (and modified) by meetings we had three weeks ago (thanks to our partners at the PA) with about 20 different players in UK publishing to discuss what needed to be addressed, how, and by whom.

Some of the Publishers Launch Conferences events will be topic-targeted. We’re planning two niche shows in the Fall: one on juvenile publishing (which both Michael and I see as the segment of the book business facing the most potential intrustion from outside players because of digital change) and one we’re calling internally “ebooks for the rest of us”. That one will focus on the mechanics of ebook publishing — from content conversion to the ultimate sale — for the smaller publishers, agents, and authors who don’t have the IT and marketing resources of the big publishers. A number of small publishers and entreprenurial authors have achieved notable success in the ebook world already. We’ll focus on what it takes to do that so that more small players can follow in their footsteps.

We decided on doing a few things differently than most other conferences. We won’t have a zillion sponsors; we’re limiting sponsor participation in the interests of our audience and in the interests of the sponsors themselves. Our first two Global Sponsors, Copyright Clearance Center and Perseus’s Constellation service, have embraced our unconventional practices. There will be no sponsor pitches from the stage during our programs. There will be no email spam sent to attendees by sponsors after the programs. Even our printed program will be designed to be helpful and worth keeping and we’ll do our best to have it contain the information that our audiences need to take home, reducing their need to take notes during the show. As readers of this blog know, organizing conferences engages me in conversations that often turn into posts.

Part of my value — and Michael Cader’s — comes from talking to people who are smart and well-informed about the topics that all of us in publishing must inevitably wrestle with if we want to stay in publishing during this time of constant and roiling change. Planning these events and recruiting speakers for them as a continuous and year-round process will be a new ongoing feature of my life, and therefore of these posts as well. I hope we’ll see you at some of the shows but, whether you’re there or not, they should result in you should be reading a more informed blogger when you come to The Shatzkin Files.

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Now the Big Six are all selling ebooks on the agency model. Random House has joined their five competitors.

It is almost a year since Apple launched the iPad, opened the iBookstore, and delivered big publishers an opportunity to rewrite the rules of the ebook marketplace, at least for their books and at least for a while. As readers of this blog almost certainly know, five of the top publishers (Hachette, HarperCollins, Macmillan, Penguin, and Simon & Schuster) used the opportunity presented by Apple’s arrival on the scene to implement the change to agency for all their customers. Random House, for reasons that made sense to me at the time and almost certainly delivered some competitive advantages to them over the past year, judging by the open annoyance of many of their similar-sized competitors, stayed with the original wholesale model.

The competitive advantaged stemmed from the fact that all the agency publishers “forced” a 30% selling margin in to the ebook retail channel whereas Random House may actually have drawn margin out of the retail channel.

Here’s what I get out of this change.

1. Agency has been successful in cracking Amazon’s hegemony over the ebook market. A year ago, it seemed possible that Amazon could have an enduring 75% or 80% of the ebook market. While they’re still the biggest piece, and almost certainly have more twice as big a chunk as anybody else, agency has enabled real competition to develop from the iBookstore, B&N’s Nook, Kobo, and Google. And the independents served by Google, Ingram, and Overdrive all over the world offer a lot of potential marketing leverage, if they’re not driven out of the game by price competition. Amazon is still the behemoth, but they’re no longer the only game in town. Agency delivered competitive advantage to Random House, but also to Amazon. If they had continued to be 80% of the market, you might not be seeing this switch.

2. Google may not (yet) be selling a lot of ebooks (as in having a big market share), but they are opening the business up to more and more independents. Independents talk to sales reps, and Random House has more sales reps than anybody else. I would imagine the company began to feel some discomfort about the feedback they were getting from the retail network they very much want to keep alive.

3. So far, none of the major publishers has taken the step of aggressively selling ebooks direct to consumers online. But they’re ultimately going to have to. You may recall that Random House’s CEO, Markus Dohle, told me last summer that he realized publishers needed to become B2C. He wasn’t suggesting he’d sell books direct-to-consumers then; in fact he insisted that there were other ways to manifest that vision other than selling direct. But, if it ever enters your mind to sell direct and you think about it for fifteen minutes, you realize that you either have to do it under agency terms or face complicated and very troubling conversations with your retailers.

And here’s what I’m watching for.

So far, as near as I can tell, there has been very little use made by the big publishers of their ability to manage prices in the market. I am not aware of much experimentation. I am not aware of any direct-marketing or dynamic pricing expertise (both of which would be relevant) being brought on board by major houses to help them realize the potential of the opportunities. And I can only think of one senior executive I know who takes much of a personal interest in pricing dynamics.

Maybe Random House will be different. They’ve been the traditional industry leader in operations and analytics. They do vendor-managed inventory for retail accounts; I’m not aware of any other major publisher who does. They’ve done sophisticated supply chain management for years.

Now they’ve had the advantage of seeing what their competitors have done, and not done, over the first year of agency pricing. It will be worth watching to see whether they approach the pricing opportunity more energetically than the other publishers seem to have done so far.

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There’s a new Big Six in town. Or maybe not “in town.” But “on the planet.”

The Big Six is a term commonly used to collectively designate the behemoths of US trade publishing: Random House, Penguin, HarperCollins, Simon & Schuster, Hachette Book Group, and Macmillan. Although there are other large players, some of whom occasionally can compete with these companies for seven-figure authors, the lion’s share of the biggest author brands are published by one of these six houses.

But from the perspective of publishers or booksellers outside the United States, there is a new North American Big Six. These are the companies that have direct relationships with publishers — all of them that matter in the US (with one noteworthy exception) and, increasingly, those that matter overseas as well — to secure the rights to distribute ebook files wherever in the world the publishers have rights.

Why does this Big Six matter so much? Because as dedicated ereaders and tablets and smartphones that can effectively serve as ereaders gain increased market penetration anywhere, the appetite for ebook content will grow proportionately. In languages other than English, the number of published books currently in epub — and therefore deliverable as reflowable ebooks — is paltry compared to what we have. It will take a long time for the publishers in most countries to make enough content ready to satisfy that growing hunger in their local markets.

And the Big Six companies have the infrastructure, and, most importantly, the rights, to satisfy that appetite everywhere.

Three of the North American Big Six are well known and would be immediately identified just about anywhere. Although Amazon, Apple, and Google have not yet opened their ebook “stores” in every country in the world that can buy ebooks, it won’t be long before they will. These three global giants all derive more revenue from outside the book business than they do from ebooks (and only Amazon, of the three, has any commercial interest in selling books except for ebooks.) But they are past (Amazon), present (Apple), and future (Google) game-changers: companies that have such an enormous presence that their entry into any area, certanly including ebooks, causes every other player in the market to sit up and take notice.

There is a fourth player like them, relatively tiny Kobo,.Kobo is also an ebook retailer. Over the past two years, they have been extraordinarily successful at getting publishers to establish direct relationships with them. (I didn’t track this with great precision, but I believe Kobo was the only company besides Amazon to have all the agency publishers on board the day agency selling started last April.) Kobo has “white-labeled”, or powered, an ebook store for Borders in the US and Red Group in Australia (two booksellers who, coincidentally or not, have just filed for bankruptcy protection). Kobo also has, according to their executive, Michael Tamblyn, at Tools of Change, “more than two million registered users.”

All four of these companies will be competing as ebook retailers in every market in the world and in every language in the world. They all start out with a robust aggregation of US-published ebooks. Apple is the laggard here. They don’t carry Random House books yet — the “noteworthy exception” referred to in the third paragraph above — and they have fewer available titles than any of the other three. But Apple comes with its own significant advantages in the form of the wildly popular iPhone and iPad. These devices assure a certain minimum amount of traffic to their iBookstore, even if Apple doesn’t move ahead with in books with the power play they’ve just exercised over subscription sellers of magazines and newspapers. (And so far we have only rumors and stretched intepretations of what they’ve said and done to suggest that they will do that anytime soon.)

Because American hegemony is resented in much of the world, Kobo may have a built-in advantage in international competition against the other three. Kobo is a Canadian company. They are also not disrupting people’s lives or terrifying them by monopolizing online print sales in any market (like Amazon), or by delivering devices designed to capture audiences and wall them off from competitors (like Apple), or by digitizing first and asking permission later (like Google.) All three of the Biggest Three (of the Big Six) have enemies and detractors. Kobo doesn’t.

Kobo doesn’t have their effectively unlimited resourcces either.

There are already retailers active in every country in the world, operating in the local language, who want to be the ebook resellers of choice in their own countries. For them, the other two members of the North American Big Six are potentially critical resources: Ingram and Overdrive.

Ingram is well known throughout the book business worldwide (and is sometimes, and currently, a client of ours.) As the biggest and most innovative wholesaler in the US for four decades, they have built both a customer base and a supplier base all over the world. They’ve been the principal wholesaler of ebooks to US independent ebook retailers since the begining of ebook time. They have deep and strong relationships with every US publisher of any size, rooted in their wholesaling business. They can set any retailer up with a wide selection of US ebook titles.

Ingram’s competitor for the role of delivering English-language (and, ultimately, all non-local language) ebooks to resellers all over the world is Overdrive. Overdrive has been in the digital content business since the 1980s and pioneered ebook distribution to libraries from the dawn of the current ebook era in the late 1990s. They also have a very broad base of publisher suppliers and can, like Ingram, provide an ebook reseller local to any country with a robust selection of other-language ebooks to vend, with an emphasis on those provided by American publishers.

Could any upstarts join the Big Six as credible providers for local competitors to the four global ebook retailers? I see three possibilities.

Barnes & Noble certainly has the relationships with publishers globally to assemble an ebook title selection that can rival anyone’s (and they’ve done it.) They are already the number two ebook reseller in the US market, miles ahead of Apple and Google and Kobo. But, so far, they have continued their brick-and-mortar strategy of sticking to the US market. It seems to me that the economics of their successful Nook family of devices and the ebook store they run would benefit from extending to a global base. But every company has to make choices about resource allocation and focus, and it is hard to quarrel with the success B&N has had competing with Kindle and iPad considering their prior experience with hardware (none). They’ve leveraged their retail presence to do it and they don’t have that resource to employ outside the US.

Copia and Blio are upstart ebook platforms. The independently-owned Copia has its social component as a unique feature (although Kobo has some pretty cool social stuff and there’s an upstart called Rethink Books with some technology that provides social capabilities around books independent of the ebook platform.) When Blio started, they seemed to offer an opportunity for publishers to enhance their ebooks readily. But the tool set that would enable hasn’t been delivered. Both of these offerings have a distance to travel to catch up with the Big Six, all of which have been in the game a long time and built up a network of suppliers and customers that it is not a trivial challenge to duplicate.

If there’s going to be a Big Seven, my bet would be on B&N.

Right now, publishers and retailers seeing the book tsunami coming closer to their shores will want to focus on the North American Big Six. If I were a publisher in any language, I’d be sure they all had my books. If I were a retailer in any country, I’d be looking at them as possible competitors or collaborators. Understanding who these companies are, what they have to offer, and what they have in mind is going to be an important component of every publisher’s and retailer’s strategic thinking for the foreseeable future.

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In a recent post, I contemplated the developing ebook markets around the world, and particularly in Europe, and observed that ten years or more of digitization efforts in the English-speaking world would have a sizeable impact on the ebook markets in other language countries. When I wrote about this earlier, it was to enumerate the challenge I think publishers in other languages should expect to see arising in their own local markets.

Today I want to view that same circumstance from the opposite perspective and consider the opportunity from the standpoint of the English-language publishers, Indeed, it is possible that it is so substantial that it will postpone Armageddon for large general trade houses, whose challenges from the inevitable decline of bookstores have concerned me for several years and which has been the subject or subtext of many posts on this blog.

I want to describe an opportunity which is devilishly difficult to size precisely. We want to know how many candidates to read books in English are in the US, in the rest of the English-speaking countries, and then in the non-English countries. Wikipedia says the world contains 914 million English speakers, of which 251 million are in the US, 232 million in India, and 168 million in the non-English countries in Europe. But that data has provenance of no consistent timing, and the US data, for example, is from the 2000 census.

One source I talked to recently who holds a statistics-oriented job and who has reason to know, insists the world has 600 million native English speakers and 1.4 billion English speakers in other countries. If that were true, the US would have less than a sixth of the total within its boundaries.

The US, by almost anybody’s measure, contains fewer than a third of the world’s English-speaking people. And everybody seems to measure “English- speaking”, not “English-literate.” But the English-literate market in non-English countries, whatever it may be today or when it was measured, is almost certainly growing faster than the native markets are. So if we accept the premise that ebooks ultimately put these potential ebook readers within reach of publishers in America (and Britain, Canada, Australia, and other English-speaking countries, of course), we are watching the access roads being built to a customer base that could double or more what has really been available previously.

The biggest single part of that growing secondary English market, certainly from a literature consumption standpoint, is in Europe. My trip to the IfBookThen Conference in Milan this past week, staged by the fledgling Italian ebook retailer Book Republic in partnership with the 4IT Group, gave me a great opportunity to further understand just how exciting this prospect should make the entire community — publishers, agents, and authors — that share the revenue from the sale of English-language writing.

I have some uncommon personal experience to help me anticipate what this is going to look like to the French, German, Italian, etc. consumer as s/he begins to discover the virtue of ebooks. I found out how incredibly convenient and satisfying it could be to read on a small screen when I started reading on a Palm Pilot 10 or more years ago. “Always having my book(s) with me” is an advantage too seldom emphasized in the print-versus-ebook comparison (partly because it wouldn’t apply in the same way to people who read on a Kindle or Nook or iPad as it does to those who read on an iPhone or any other phone or PDA that one always has in a pocket), but it is powerful. It was powerful enough to totally hook me once I discovered it.

But when I started reading that way, I was in a tiny minority and remained in one for many years. The few of us reading ebooks before Kindle pretty quickly encountered a problem that those French, German, Italian, etc. consumers will start to encounter, regardless of what device they read on. There just wasn’t enough to choose from! I remember routinely spending 15 or 20 minutes poring through the choices, seeing what I’d already read each time I went shopping and not nearly enough that I wanted to read but hadn’t yet. That was why, until Kindle arrived and the number of available titles exploded, I found myself making some odd choices: reading Tarzan (glad I did) and buying and reading a biography of Grover Cleveland for which the ebook cost $28! (I was glad I did that too.)

Shopping required an extraordinarily frustrating expenditure of time and inadequate title availability was the reason why I continued to read some print books for the first several years after I would have happily switched over completely (which I have since done.)

But even back in the early years of the past decade, the number of ebooks available in English dwarfed the number most European language consumers will find this year or next. The incredibly paltry number of books converted to epub in most European countries absolutely assures that our European friends will encounter the same annoying frustration I did.

Until they shop for ebooks in English.

And they will. Indeed, they do. I reported in the prior post that we’ve heard anecdotally that 25% of the printed books sold in Denmark are in English. A friend in tiny Slovenia reports that more than 15% of the books sold there are in English. A Scandinavian bookseller with several stores in Scandinavia and Berlin whom I met at IfBookThen reported that 20% of the books he sells are in English. And those sales are being achieved despite the cost (and, therefore, price) and supply (and, therefore, choice) barriers inherent in physical goods.

(The consultants A.T. Kearney did some research with the Book Republic team to prepare for IfBookThen. They found 100,000 epub titles in German and 50,000 in French, fewer than 2/3 and 1/3, respectively, than Amazon had in English more than three years ago. And they found far fewer than 10,000 available in Spanish, Italian, or Swedish!)

And while northern Europe is more English-friendly than southern, I picked up an interesting fact (from a Brit, not an Italian) while I was in Milan. French was the second language taught to all Italian children in schools until 1991 when it was switched to German. German had a very short run. Since 1997, the second language all Italian kids learn is English. So the Italian schools will be turning out customers for English-language publications and increasing their presence in the local population from now on. That’s symptomatic of change taking place all over the world that keeps delivering English-language publishers new customers.

One American friend at a large general house not in the Big Six told me last week that 10% of the ebooks he’s selling are from outside the US (and that wouldn’t be including the UK.) A global ebook retailer told me that 7% of their English-language sales today come from non-English countries. Those numbers will rise inexorably, and sometimes in explosive spurts, for many years to come. It would require one to see around more corners and over more mountains than I care to attempt to forecast how high a percentage of English-language ebook sales might ultimately be made in non-English countries, but it would surely seem that figuring they’ll reach 25-35 percent over the next five or ten years or so wouldn’t be an outlandish guess. (Whether five or ten will be much clearer in one or two.)

And while some people wonder whether the ebook sales they’re making now are cannibalistic or incremental (almost certainly, they’re both!), the sales that will be made abroad in non-English countries are far more likely to be incremental. They could be adding more sales over the next five years than the problems at Borders today will subtract.

This is not some future scenario about which people can be relaxed and wait. This is an immediate opportunity.

It must mean the end of open markets for English-language ebooks, and soon. Open markets have worked for years for print, giving multiple players an incentive to exploit a sales opportunity with effort and service. But open markets for ebooks will almost certainly reward one attribute and one attribute only: the lowest price. Since ebooks benefit from relatively reliable enforcement of differential prices by market (for those that curse DRM, this is one more reason it isn’t going anyplace anytime soon), the non-English consumers will shortly be able to identify the open market ebooks. They’ll be the really cheap ones!

Agents can’t let this situation persist. Those that aren’t closing open markets for ebooks already certainly will be imminently. The UK publishers have been trying to close Europe in their favor for a few years now; I picked up anecdata (love that new term!) in Milan to suggest that American publishers have woken up to this and are now increasingly taking open markets back.

It would seem logical that the open market for ebooks will go to the publisher that writes either the biggest check or the first check, and that will more often be the American publisher.

This also calls for a new awareness of global (actually, more accurately, “glocal”, which I’d describe as “global, but targeted”) opportunities in marketing, particularly as it is done more and more through online means. To take one recent example from my own personal reading, Ken Follett’s “Fall of Giants”, there are hooks galore in the story to interest readers across Europe, but particularly in Russia and Germany, where much of the action takes place. Fall of Giants is a novel; the opportunities will probably arise even more frequently with non-fiction. I don’t know exactly when this calls for every American house of a certain size to put a person on “glocal marketing” or to add a “glocal marketing component” to many books’ rollout plans, but it might be now. It certainly won’t be long.

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