Industry Events

This post invites you to help us shape the agenda for Digital Book World 2015.

It was five years ago this summer that David Nussbaum and Sara Domville of F+W Media took me out to lunch and said they thought the book business could have a more useful digital conference — one, in their words, that would give you things you could go back to the office and use — than the existing set of conclaves, led by Tools of Change, then provided. And they flattered me and provoked my imagination by saying “we think you’re the guy to program it”.

At the time, I was in a partnership with O’Reilly Media, the owners of Tools of Change, working on an initiative called “StartWithXML”. We had a conference in London coming up as part of our team effort that was only a few weeks away. I wasn’t looking for a way to compete with them.

But, when I thought about it, I realized that by changing the focus of our conference from “technology and publishing” (which was theirs) to “the business challenges created by technology for trade publishers”, we would be able to do something quite different than they had. Agents would be included, and, this being long before the agents were hiring people with digital publishing expertise to help their authors, they weren’t invited to be part of Tools of Change. I knew their voices were important when you talked about how the business of publishing would be affected by digital. And real challenges around resource deployment and marketing, which weren’t strictly-speaking about technology but which were top of mind for trade publishers, would make our agenda when we framed it this way as well.

They named the new conference Digital Book World.

This recommendation really just followed my own advice. I had been observing that book publishers needed to become more “vertical”, by which I meant “audience-specific”, in their thinking. Tools of Change was horizontal; it was about all publishing and technology. We’d focus Digital Book World on a particular segment of publishers and therefore be able to make it more meaningful for them.

Now we are planning our sixth Digital Book World conference for January, 2015. A lot has changed. Tools of Change shut down in 2013. Perhaps partially aided by the disappearance of its biggest competitor, Digital Book World has continued to grow, with more than 25 percent growth in 2014 over the year before.

But a big part of the distinction that guided us as we built DBW, the emphasis on trade publishing, is eroding in importance as the trade itself — which means the bookstores and libraries and the wholesalers that serve them — become less robust paths to the consumer. The challenges for an industry beginning to move from physical goods in stores to virtual goods online are different as the new paradigm becomes the dominant paradigm.

Except for self-published genre fiction (and perhaps even for publisher-issued genre fiction too), that paradigm shift hasn’t really happened yet, but the day when it will is in sight. At some future Digital Book World — not 2015, but maybe 2016 and almost certainly before 2020 — we will be looking at a “trade” book industry which does most of its business online, not through brick-and-mortar stores.

(In fact, the world has changed so much that one thing on my list to discuss is a DBW 2015 panel that would reconsider the whole StartwithXML premise. When we were thinking about this in 2009, we figured the biggest payoff from going through what could be a painful workflow change was that you’d be able to make ebooks of complex books much more efficiently. That’s probably still true, but the ebooks for complex books also haven’t sold very well and their future is a bit cloudy. Knowing that, how important was that change to make, really? We’ll ask some publishers who have gone through it and, depending on what reports we get, perhaps put it on the program for discussion in January.)

All of this not only means that what we have called trade publishers may be renamed, they will also find themselves with new channels to consumers and a new set of competitors. The prospective new landscape will get a great deal of attention from us next January and we are beginning to interact with players that wouldn’t really have belonged at DBW in 2010 or 2011 but who might be smack in the middle of our business by 2017 or 2018.

Who are they? They are educational publishers, both K-12 and college. They are newspapers, magazines, and advertising agencies. And they are digital-first publishers, coming out of web sites and other content creators and brands, who see the opportunity to reach audiences efficiently through a book business that no longer requires a big investment in printed inventory and an organization reaching thousands of small sales outlets for meaningful participation. And they are start-ups and technology companies too.

We are going to start this year by looking for the Venn diagram “overlap” between these new audiences and the trade publishing audience we’ve served for half a decade.

For newspapers, magazines, and advertising agencies, that means we’ll be looking for the players who have already found opportunity in the book publishing ecosystem. Although for all of them ebooks are really a highly complementary opportunity, it looks like newspapers have made that discovery more rapidly than the others. Newspapers and magazines, particularly, have content and consumer-facing brands that create a natural fit for ebook creation and marketing. For advertising, the stretch is a little greater and, frankly, we’ll be looking for pioneers that see the opportunity to promote their clients’ wares using ebook discovery and word-of-mouth as tools. It is inevitable that they will but finding the early visionaries will be the first challenge.

There is a new component of the advertising business called “content marketing” which also, ultimately, seems like a fit for the ebook business. What it means today is that a digital ad agency creates content which promotes a client or product; content which is meant to be found online and delivered for free.

There are two ways that book publishing could — and almost certainly will — be part of this new component, although neither seems to have happened with any regularity yet. One is that the agency-created content could be delivered as an ebook, not just as discoverable web content. This has probably not been the first instinct of the agencies for two reasons. One is that they figure that nobody would “buy” what they’re willing to give away for free. The other is that there’s a bit of a learning curve about how to process content into an ebook and put it into distribution. (Frankly, if you’re willing to live with the ebook being made available only through Kindle — which gets you much more than half the market — the learning “curve” is just about a straight line. Amazon makes it pretty damn simple.)

My niece, Kailey Moran, writes a blog about cars for women for a marketing company called Reynolds and Reynolds. It seems to me like a short step for her to put together an ebook for the same audience on the same subject. Her company isn’t doing that yet. I’m betting that within the next couple of years, they will.

There will also be new interactions occurring between college textbook and school publishers and their counterparts in trade. The educational publishers are moving from being primarily creators and distributors of “textbooks” to becoming creators and managers of “learning platforms”. These not only attempt to contain the syllabus and pedagogy that was in the textbooks, they also provide teachers with monitoring and assessment capabilities. And they will also be the environment in which the required and supplementary reading — often of trade-published books — will take place.

That will increasingly put the educational publishers in the role of aggregators for their institutional customers. This is likely to be a difficult and contentious area for the next several years because trade publishers will have to be satisfied with a new business model. They have historically sold printed books either to institutions (the normal way things happen with public schools) or to the student end-users (the normal way things happen in private schools and colleges). In the latter case, they often are able to make a sale for every user. Doing so is an artifact of the physical world and will get increasingly difficult to do, but trade publishers are understandably reluctant to move quickly to models that pay them less for each use, even if they already sell one printed book for multiple users (over time, because the books don’t wear out) in school situations now.

So the school and college publishers and trade publishers are going to have to talk and I think interaction at Digital Book World could jump-start some conversations.

We are guided in our programming at DBW by our Conference Council, a group of leading industry thinkers — some independent but most of them executives within the industry — who meet with us to discuss the program and then provide suggestions on an ongoing basis for speakers and topics. To prepare for the meeting we schedule to discuss the agenda, we offer our Council the opportunity to offer their opinions about each of the sub-topics we’ve identified under the major headings. (It’s a 2-hour meeting with 30 people or so; we can’t discuss everything and I need the guidance to put things in priority order for time allocation.) This year, for the first time, we are seeking that same input from readers of The Shatzkin Files.

We will be looking to create good programming under seven major themes:

Publishing in a global economy
The changing publishing ecosystem (roles and relationships)
Data-driven publishing
Rethinking marketing
Developing business models
Technology and living on the cutting edge
Education and book publishing are developing a new relationship

If you want to help us decide what are the most important sub-topics under these headings, you can see how we break them down and register your opinion about them on our survey monkey poll. When our Conference Council meets, we will make them aware of the results of this voting, as well as the separate tally we’re keeping of the vote by the Conference Council itself.

And an extra robust thank-you for anybody who can suggest a sub-topic that should have made the list and didn’t.

We don’t really understand the ways of Feedburner, our current (but soon to be past) distributor of the email version of this blog, but it didn’t distribute my last post about when an author should self-publish. So if you’re getting this one by email and didn’t get the last one, we’re trying to make it easy for you to read it now by clicking this link. We will soon be moving over to Mail Chimp so these problems will be in the rear view mirror.

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The London Book Fair is an every-second-or-third-year thing for me, going back many decades. From an English-centric perspective, it is like a mini-Frankfurt. All the UK players are there and a lot of US senior executives. But because it is so accessible to the Continent, you can get a taste of how things look to the rest of the world.

In the US, we look to me to be in a period when two dominant giants — Amazon for online bookselling and Penguin Random House for general trade publishing — are consolidating their positions. Amazon’s enormous market share is growing, both for print and ebooks. It is too early to draw the same conclusion about PRH, but my guess is that a year or two from now we’ll have seen them taking share from their biggest competitors just like Amazon is from theirs.

(Dominant giants will be part of a conversation I’ll be taking part in on a stage in London. I’ve been asked to participate in The Great Debate, where this year the proposition is “It’s all about size. Bigger is always better.” I’m arguing the affirmative with Ken Brooks of McGraw-Hill Education as my teammate. We’re opposed by Stephen Page, the CEO of Faber, and Scott Waxman, who is both an experienced literary agent and the entrepreneur behind Diversion Books, a digital-first publisher. It should be fun. And friendly. We’re all nice guys.)

The dominant US brick-and-mortar retailer, Barnes & Noble, appears to be fairly healthy in its traditional business. It is shrinking, but the store operations are still profitable and well run. They appear to have benefited from the demise of its erstwhile competitor, Borders (as have the independents). From across the Pond, one does not get the same impression about UK’s Waterstones chain. However, in the UK, there are forces we don’t have in the US: not just the ubiquitous newsstand-type WHSmith stores, but also two supermarket chains, Sainsbury’s and Tesco, which are each ambitiously trying to build a book business and their own ebook channel. One thing I’ll be asking everybody about is the impact these retailers have in the book marketplace, particularly when we get beyond the top sellers. Perhaps if they’re doing well, it would encourage Walmart to get serious about bookselling. Certainly Walmart would like to do anything they can to poke Amazon in the eye.

Without serious competition from new players who are well-funded, like the UK supermarkets, it is hard to see what stands in the way of the global ebook giants: Amazon and Apple and, to a lesser degree, Google and Kobo. Perhaps I can get a sense in London of how Barnes & Noble’s multi-territory expansion for Nook is faring. But, however they do, there is a so-far little-noted effect beginning to become evident that could tilt the global book business to the English-language marketplace, and to the US in particular.

In a recent conversation, an executive at a Big Five company told me of a recent development. His company had licensed a few titles for Russian language rights to a publisher in Moscow. But by which retailers would most of those ebooks be sold? The answer is Amazon, Apple, Google, Kobo and Barnes & Noble! And the Russian publisher, really just breaking into the ebook business, has far more limited access to these retailing giants than the US publisher which had licensed them the rights.

So the US publisher, in a suggestion that seemed in everybody’s interests, offered to be the “distributor” of those Russian ebooks to the major accounts. The deal was made and it worked. I said to the executive who explained this to me, “You could be helpful in distributing all their books, not just the ones you licensed them.” “Exactly,” he said.

But then we took the conversation a little further. This house is wondering whether, in an ebook-dominant world, it wouldn’t make more sense for them to publish books themselves in Spanish, Mandarin, and French (the first three languages they are thinking about). After all, the translations are done by freelancers. Anybody can hire them no matter where they are. And if most of the books sold are ebooks, and if the publishers of English, especially those in the US, have multiple daily contacts with the big ebook retailers and others don’t, then what is the point to licensing away those rights?

That approach would mean that publishers in at least some non-English territories would, at best, be able to license the print rights for the local geography they really cover. And it would mean that the biggest publishers with the biggest checkbooks to sign the biggest authors and titles will be able to benefit from an even larger share of the book’s global market while paying the author more than they could earn with a local publisher sharing in the other-language rights.

If this is more than one company’s inspiration right now, I should be able to find evidence of that at the London Book Fair.

The other thing for me to learn, of course, is how digital marketing of books looks from the UK. In our fledgling new business with Peter McCarthy (take a look at his new post) we have already done some title optimization work for two UK-based publishers, one large and one medium-sized. So we’ve learned how to do the work using UK-based Google and Amazon and putting BIC codes rather than BISAC codes into the metadata. We’ll be formally announcing the new business and opening our web site the day before the London Book Fair opens. I expect to find a lot of interest in what we can offer, just as we have in the US. There is no doubt that the London Book Fair presents the best possible opportunity to find out very quickly what our own opportunity is outside the US as the need for sophisticated marketing naturally follows the growth and increasing complexity of the overall digital environment.

One person I will be sad not to see at London Book Fair is my longtime friend Bruce Robertson, a founder of the pioneering packagers The Diagram Group, who died a little over a week ago at the age of 79. Bruce was sui generis: a brilliant man with a unique gift for visualization that was the guiding spirit behind dozens of global bestselling illustrated books. Forty years ago, I had the opportunity to sell three of Diagram’s greatest books, “Rules of the Game”, “The Way to Play”, and “Man’s Body” when Bruce’s publisher at that time, Paddington Press, was distributed in the US by my family’s distribution company, Two Continents. I always enjoyed seeing him and hearing his witty, insightful, and often cutting take on the people and practices in our business. Fortunately, there were many opportunities to see Bruce and his endlessly good-natured wife, Pat, over the years, at industry events or when he was in NY or I was in London. We are all one of a kind, but some of us are more obviously so than the rest of us. Bruce was like nobody else. He’ll be missed by many friends from all over the world.

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Digital marketers who want to sell books are increasingly turning to the virtual places where readers cluster. This includes marketing through the major social networks (Facebook, Twitter, Pinterest, etc.), using the data mining tools available to target within those networks, as well as marketing in niches and online communities of readers (in some cases publishers are even building vertical communities themselves). Publishers are also increasingly turning to book- and reading-focused social sites to get the word out about their books. These vehicles carry an additional bonus in the digital age: they’re global and give publishers a one-stop opportunity to reach markets beyond their natural national audiences.

Goodreads, recently acquired by Amazon, has built a network of book-oriented conversation. Now with 19 million members, they have been for the past few years trying to show publishers how to use the platform as a marketing tool. This was, of course, their original reason for being. They have overtly built a site around books and conversation about books. Since the book business routinely deals in “comps” — books that are like the book I’m trying to sell you — Goodreads has a firm foundation from which to sell publishers marketing services. They’ve been doing that for some time.

What is not clear is whether that business will be reined in by their new corporate owners in any way. Amazon’s prior history doesn’t demonstrate great interest in marketing that isn’t Amazon-centric. And we know that big publishers are generically nervous about Amazon and not inclined to spend any more promotional money than an already aggressive large account with lots of coop buckets already squeezes out of them.

Whatever the extent to which Goodreads maintains its mission as a marketing vehicle for publishers to reach book audiences regardless of where they shop (and, as of this writing, the B&N link is actually above the Amazon link in their drop-down menu of “online stores”), publishers are bound to be looking for alternatives to work with as well. We think we see two of them emerging, although neither of them started out in life aimed at being a marketer of books available to publishers.

Wattpad is a Canada-based startup that is a reading and writing community. It preceded Penguin’s “Book Country” , started with social reading of public domain titles, and doesn’t have Book Country’s overtly commercial focus, nor its stated emphasis on genre fiction (although, perhaps inevitably, Wattpad’s strongest areas are YA, paranormal, romance, and fantasy), but the sites are similar in that they give aspiring writers the opportunity to have their work commented upon by a community of other aspiring writers. Wattpad has grown to over 10 million users. And it is a very active and engaged community. They publish stats suggesting that that users spend an extraordinary amount of time on their site, something like half-an-hour, twice-a day. And they have attracted such luminaries as Margaret Atwood to post content on the site.

There are already several examples of aspiring authors who have published on Wattpad, built audiences, developed their stories, and gotten a book deal including Beth Reeks, Abigail Gibbs, and Brittany Geragotelis. And PW just did a piece on up-and-comer Nikki Kelly.

With its large number of highly-engaged readers and a track record of being successful promoters for undiscovered talent, Wattpad has recently started to call attention to the opportunity for publishers to market to its audience. It is now encouraging publishers to connect with its audience by posting teaser or attention-getting content in advance of the launch of a book. Random House, Scholastic, and Macmillan (for Amanda Hocking) have already taken advantage of this.

A similar opportunity is now also being seen by Scribd. Scribd is a repository of documents. It is often used as a “convenience”: a place to post court decisions or company reports or anything somebody wants to make accessible to a broad audience. In its early days, Scribd was seen as a pirate-enabler, but it has aggressively worked with publishers to make sure unauthorized copyrighted content is taken down. Meanwhile, it has built a vast treasure-trove of documents from 200 countries in 70 languages and is getting 10 million unique visitors a month.

That’s a lot of people looking at a lot of documents, giving Scribd a lot of knowledge about who they are and what else they might like to read.

Our view is that the marketing opportunities through all three of these companies should be understood by publishers. It is early days for all three of them, really, but as marketing entities Wattpad and Scribd are really just getting started. Some things have been “proven” to work at Goodreads, but, really, all three of them are like jungles still being hacked through with superhighway travel still in the forseeable future, but not around the corner.

There’s quite a bit of marketing activity by US-based publishers on Goodreads; it’s beginning to happen on Wattpad and it is a gleam in the eye at Scribd. But they all have big numbers of readers paying attention to their site and they’re all looking for ways to make themselves more valuable. It looks like Wattpad and Scribd are seeing the possibility that marketing for publishers could be a very significant revenue-generator, if not their principal one. (Goodreads started out with that hope.)

Painful aspects of the digital transition — the diminution of bookstore shelf space and the reduction of room for book marketing in the established press — are just beginning to bite in markets outside the English-speaking world. With all three of these communities teeming with non-English-speaking members, they all become tools publishers around the world will need to know about.

And that’s why we have them all speaking at our Publishers Launch Conference at Frankfurt, focused on what meaningful marketing reach they can offer to publishers outside the US. As conference programmers, we look for those win-win situations where what the presenter wants the audience to know is information they will find immediately useful. For our Frankfurt conference audience, which last year had c-level executives from 25 countries, this would appear to be a bull’s-eye.

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At our Publishers Launch Conference on the Wednesday of BEA, Michael Cader and I introduced a new feature we think will become regular at our events: a candid 1-on-1 conversation between us. It went well.

In fact, it went so well that what reads like a pretty damn accurate verbatim account of much of it constituted a story for Ed Nawotka at Publishing Perspectives. So, now, thanks to Ed, much of the world knows that I made a number of pretty bold forecasts, probably the boldest of which is that we’ll see the US market boil down to one dominant trade publisher over the next 10 years.

There are a lot of unexpressed assumptions in that calculation. And, in the “predicting the future” part of my business, when I say 10 years I don’t count myself “wrong” if it takes 15. So, with thanks to Ed for reporting me accurately, it seems worthwhile to elaborate a bit more on what I said last week.

Operating with absolutely no “inside” knowledge, I outlined two expectations I have for initiatives we’ll see from Penguin Random House, about which I’ve written before. One is that they’ll create an ebook subscription offering which operates exclusively for their own books. The other is that they’ll apply the knowledge they’ve already gained about vendor-managed inventory (VMI) to create book departments within stores of all kinds, taking advantage of the reduction of shelf space in dedicated bookstores and the related challenges facing all other retailers to maintain top line revenues for whatever is their line of business as sales of all things, not just books, migrate online. Both of these capabilities could also be extended to include their distribution clients; it might require some renegotiation of terms to do it, but it would almost certainly be seen as a beneficial add-on by the distributees.

If PRH did that, and if they hit my made-up-from-thin-air target of 1000 proprietary sales locations over a couple of years, the new trade behemoth would have a bigger distribution base than all the other trade houses to go along with their already-bigger checkbook. So the consolidation of the general trade business under them could occur author-by-author as contracts expire, not requiring them to buy or merge with other companies.

I think the ebook subscription service is a relative no-brainer, assuming Random House can come up with the deal structure to get big authors to agree to it and, without a third party taking out some of the revenue, that should be doable. They don’t need 100% participation; I’d guess that if half the big-brand authors go ahead, the others will follow and the rest should be delighted with the opportunity.

I also think that every major publisher should be offering an ebook subscription service for their kids’ books, because they all have extensive lists and major brand names for that market and subscriptions will prove a very convenient way for parents to give kids lots of reading material at a predictable cost as the book world goes increasingly digital. There are aggregators in the field doing that now across many publishers’ titles, but there might be room for a lot of offers here and the publishers would be wise to consider whether they do best by creating their own subscription offers, licensing their big brand content to aggregators, or doing both.

But the build-up of proprietary offerings at retail and the prediction that trade publishing will consolidate as radically as I forecast, depend on the future of consumer behavior which nobody, and certainly not I, can predict with any certainty.

What most industry observers track is how the percentage of a publisher’s revenue that comes from digital books is rising. That’s commonly considered to be in the 25-30 percent range at the moment, going up by perhaps 30-40% a year (so next year it might e 33-38 percent) after having been rising much faster in recent years. A more nuanced view of this recognizes that it is particular books that (so far) really sell in digital form — generally books you read from beginning to end rather than those you skip around or dip into or which require illustrations — while others do not. For fiction, we are likely at 50% or more digital for a high percentage of the titles published.

In fact, PriceWaterhouseCoopers, tracking ebook sales against print sales, believes that digital will exceed print in a pretty short time.

But an even more important index if you’re charting the future of publishing is what’s bought in stores versus what’s bought online. Obviously, all ebooks are bought online. But there’s pretty strong evidence that the percentage of print books sold online is still steadily rising. In our discussion on stage, Michael Cader (the most reliable source for industry facts there is) remarked on the fact that Amazon print sales are still rising; more slowly than before, but still rising. Juxtapose that fact against the reality that total sales of print books through retailers are not rising, and sales through bookstores are certainly shrinking and it is clear that the online share of print sales is still going up.

I’m assuming that trend will continue. When bookstores close, the people who shopped in them often switch to buying online. When a bookstore reduces the selection of titles it offers, as Barnes & Noble certainly seems to have done, some of the people who browsed it are going to switch to browsing online. This leads to more stores closing and to more stores reducing their book inventory. It’s called a vicious cycle. It’s not a new concept.

Every publisher is trying to put print books into more retail places with great urgency. Some have better lists for it than others; some have better sales policies and other tools for it than others. But the barrier, most of the time, is that buying books is really hard for retailers. Each book is a unique product that has to be tracked uniquely and thought about uniquely and a store has to have at least hundreds, and preferably thousands or tens of thousands of them to be a decent place to shop for books.

That’s why vendor-managed inventory is so important; it can eliminate the need for the store to have book-buying expertise as a pre-condition for them to carry a decent range of books, even in a defined niche market.

So if PRH does what I think they will do and the shelf space for bookstores keeps shrinking and the share of book sales that take place in stores shrinks along with it, the position of other general trade publishers becomes increasingly difficult to navigate. PRH has additional distribution that nobody else has and the biggest checkbook among publishers. Amazon will have an increasing share of the potential market, so authors signing with them will be missing less and less eschewing what most publishers could give them beyond Amazon and the biggest checkbook of all.

Almost two decades ago, when the Internet first posed a threat to the business model for scholarly journals, I asked my friend, Mark Bide (now head of business development for Publishers Licensing Society in the UK), what would be the early warning sign that the traditional journals model is headed for trouble. He said “when the scholars stop submitting to the journals. As long as the scholars submit, their business will work.” In other words, the danger wasn’t so much losing their sources of sales as it was losing their sources of intellectual property.

It looks to me like that wisdom will apply to general trade publishers over the next decade or so.

In the discussion with Cader, we talked about how the other publishers might respond to this. It would take all four of them merging to present an equivalent title offering to PRH, and that would, at the very least, take some time. Another possibility is that a third party aggregator could create a competitive set of titles, or even do the job for the whole industry including PRH. But the challenge there would be terms; publishers need to give up margin to make this workable for a 3rd party, a problem PRH wouldn’t have on their own. And it is also true that PRH could probably complete its set of bestsellers if it had to by buying in those that it didn’t publish for this offering. One CEO I talked to about this nearly a year ago conceded that, if PRH went this way, that CEO’s company would almost certainly have to sell them whatever books they wanted.

And while this post is still extremely speculative, it has what might be the virtue of being fairly consistent with the thinking reflected in the speech I did at BEA six years ago predicting “the end of general trade publishing houses”. 

Final point on this one. I am not saying that nobody but one publisher will publish books that people will want. There will be publishers in many niches, including fiction niches. What I’m predicting is that the “general trade” model of a publisher that issues books on subjects across the board, trusting the book retailing system to sort out the books for the customers by subject and genre, will consolidate to a single player in the next couple of decades.

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The organizers of the Buenos Aires Book Fair, which will run for the next few weeks, invited me to speak at an opening session of their event last Friday. They left the topic completely up to me. What I offered to do, which the organizers liked, was to review the history of the past 20 years of digital change in the US and in the English language which has brought us to this point. The presumption is that understanding how it happened to us will help them understand what is going to happen in their market, in other Spanish-speaking markets, and in other countries and other languages.

The underlying premise of my talk, which was delivered formally at a Book Fair opening event last Friday and informally to other gatherings they scheduled for me — of students, of young editors, and of some publishing executives — and in a meeting consulting with about 20 employees of one publishing house, was that what happened in the US and then elsewhere in English was unique and would not be replicated in the same way in other languages and territories. What I had identified as the unique characteristics of the US market were:

Three hundred million people with one language, one currency, one commercial set of rules.

A powerful player (Amazon) able to change both publisher behavior (twisting arms to have them provide more titles as ebooks) and consumer habits (getting them to consider what started as an expensive device — a $400 Kindle) with their marketplace power.

Indeed, no other market has those two elements. In fact, in many markets, including all of the players I talked to in Latin America, Amazon is not seen as a really signficant factor.

In addition to the conditions that made the US market unique, I stated two additional assumptions which drew little objection from my audiences in Buenos Aires.

At some point — whether it is five years from now or 20 years from now — the world’s book publishing markets will look very similar. That is, the effects we see in the US — patterns of ebook uptake and the consequently devastating effects on bookstores — will somehow be replicated in other markets.

Both because the unique market characteristics of the US don’t exist elsewhere and because the market already made in the US has created global players and infrastructure that weren’t here when the ebook revolution caught hold, we need to expect that it will be a different path to the future in other places from what we saw in the US. The markets will not be made by the inherent marketplace scale and by Amazon, as ours was.

I thought some things we’ve seen constituted “universal” lessons worth taking on board. We’ve seen ebooks consistently work commercially for narrative reading and not for any other kinds of books. We haven’t seen “enhancements”, like video or interactivity, pay off in bigger sales or in making it easier to command higher prices. I suggested they should expect the same, and the people I spoke with agreed. They should also expect that the product competition from outside the commercial publishing community, which we’ve seen so far primarily from self-published authors, will drive down the prices for books from established authors as it has in our market.

But the more I probed, looking for what would make the market, the more I ended up in blind alleys. There is no online purchasing market anywhere in Latin America to compare with ours. That’s why Amazon hasn’t gained a strong foothold. Kobo’s strategy of working through local booksellers — an alliance has been formed in Brazil and they are clearly looking for partners elsewhere — apparently hasn’t made much of a dent either. One publisher said Apple sales were “promising”, but they’re still “insignificant”.

The reality underlying all this futility is the relative dearth of credit card use. In the US, we have had about three generations of ubiquitous credit card use. They are second nature to us. And the online purchasing world — Amazon in particular — would never have achieved the position they have if that weren’t true.

Well, it isn’t true in Latin America.

There is no way to make an ebook market, which must be an online market, without a payment mechanism. And the one we have in the US isn’t set up to work in Argentina, Brazil, or the rest of Latin America (or, for that matter, in many other parts of the world).

Of course, the cell phone carriers, who do send a bill and collect money from the masses in all these countries where credit card use is limited, had figured that out a long time ago. Nokia and others have been dancing around this opportunity for years. Txtr, a Germany-based ebook play, targets the cell phone companies as its path to the market. Txtr is building an inventory of titles and has come up with an ultra-low-cost ereading device called beagle to jumpstart their market. In doing that, they show that they learned something from Google’s experience, where ebook sales only started to grow when the Nexus7 tablet, which is tied to Google, made its way into the market.

All the conversation led me to come up with my own version of an “answer”; I don’t know if anybody else has made this suggestion but the small bit of conversation I was able to have between having this thought and leaving Buenos Aires didn’t uncover evidence that anybody else had.

It takes three components to make an ebook market:

1. A device to read the ebooks on. That could be a laptop or desktop computer or dedicated ereading device, but it is most likely to be a smart phone or a tablet.

2. A store: a merchandised selection of ebooks that can be shopped through browsing and searching that is compatible with the device.

3. A payment mechanism.

In the US, we really didn’t think about the payment mechanism. For many other places in the world, that’s a very tricky part.

Txtr is trying to deliver the missing pieces to the solution to the telcos, right down to delivering a very inexpensive device that can be the reader if the cell phone is not.

What occurred to me, and I’m wondering whether it is being developed by anybody else, is what I think would be an even better — as in more likely to build a market quickly — solution. What I’m imagining is that a device manufacturer (or more than one, but if one, preferably one that makes both smart phones and tablets) teams up with a cell phone company (to do the billing) and persuades the ebook retailers — Amazon, Google, B&N, Kobo — to accept payment through the phone company. Then that hardware manufacturer has a fabulous value proposition to help them sell their devices and the ebook market has a choice of the best retailers with the best selections of ebooks already aggregated.

Actually, persuading one retailer will persuade them all. If Samsung were pushing a tablet and smartphone and got any of the major ebook retailers to go for the proposition, the others would surely have to follow. And, in fact, it would make sense for either Apple or Google to do this when they sell apps in credit-card-challenged markets as well.

Another complication in some places — particularly Brazil and Argentina at the moment — is created by complex regulations that make the sale of hardware manufactured outside their country either impossible to get or extremely expensive. Although that’s a problem that extends beyond the book business, it is much more likely to be solved by a multi-function device-maker than for one dedicated only to ebook consumption.

It is interesting to think about Apple’s position here. The other big ebook retailing operations already provide apps for both iOS and Android devices as a matter of course. The iBookstore, however, is a Mac-only play. If the solution I’m envisioning were to roll out around the world — and one can imagine a company like Samsung making such a thing happen — would that continue to be the wisest play for the Apple-owned ebook retailer? I think not, but one can only imagine how intense the internal discussions around that point could be.

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Blog posts have been scarcer for the past couple of months because I’ve been so engaged with a major responsibility: putting together what amounts to 7-1/2 days of conference programming that will be presented on four days next month in New York City.

As most readers of this blog probably know, we’re responsible for the programming of the two-day extravaganza that is Digital Book World. DBW 2013 — taking place on January 16 and 17 at the Hilton New York Hotel — will be the fourth iteration of the event, which aims to explore the commercial challenges facing trade publishing in the digital transition. DBW is not about technology per se; it is about the business problems publishers must cope with in an age of technological change.

DBW’s main two days are divided between morning plenary programming — all 1500+ people in one big room — and afternoon breakouts. We’ll have up to five simultaneous breakout sessions in each of three slots each day. So we have what amounts to 4-1/2 days of programming in the breakouts plus one on the main stage.

Because people really do come from all over the world to attend DBW, we were delighted to agree when they asked us at Publishers Launch Conferences (the conference business I own with Michael Cader) to add a show on each side of theirs to build out a week of programming. (The team at DBW itself are also putting together some pre-conference workshops that will run on Tuesday.)

So on Tuesday, January 15, we’ll do our second annual “Children’s Publishing Goes Digital” conference at the McGraw-Hill Auditorium (put together with the invaluable assistance of our Conference Chair and close friend, Lorraine Shanley of Market Partners). And on Friday, January 18, we’re presenting (in conjunction with the DBW team) a new program called “Authors Launch“, a full day of marketing advice for publisher-published authors. (Self-published authors are welcome and will learn a lot, but the program is framed for authors who are working with publishers, not looking for ways to avoid them.)

Programming the “Children’s Publishing Goes Digital” show revealed what we think will be the most important theme in the children’s book space for the next few years: the development of  digital “platforms” that, like subscription offerings (which some, but not all of them, clearly are), will “capture” consumers and make them much less likely to get ebooks and other digital media from outside of it. The list of platform aspirants in this space is long and varied: Storia from Scholastic; RRKidz from Reading Rainbow (the TV show brand); Poptropica from Pearson (which launched Wimpy Kid before it was a book); Magic Town; Disney; Capstone; and Brain Hive. All of them are presenting, as well as NOOK, which, like Amazon Kindle, has announced parental controls on its platform that encourage parents to manage their kids’ reading experience there.

There are other big issues in children’s publishing, particularly the creation of original IP by publishers so they can better exploit the licensing opportunities that follow in the wake of successful kids’ books. We’ll have data presentations from Bowker and from Peter Hildick-Smith of Codex to help our audience understand how kids books are found and selected outside the bookstore in today’s environment.

But we know that the digital discovery and purchase routines will be markedly affected by the platforms as they establish themselves. Publishers are faced with an interesting conundrum. They can’t reach the audiences that are loyal to a platform without going through the platform. But it is the presence of many publishers’ books that strengthens the attraction of the platform and, once it gains critical mass, the value of the content to it (and probably what it will be willing to pay for the content) is reduced. So publishers licensing content to these platforms may be strengthening beasts that will ultimately eat them. I think the roundtable conversation Lorraine and I will lead at the end of the day, which will include publishers Karen Lotz of Candlewick, Barbara Marcus of Random House, and Kate Wilson of Nosy Crow, will have interesting things to say about that paradox.

We’ve developed some “traditions” in the four years we’ve been doing Digital Book World. As we’ve done the past two years, the plenary sessions will open on Tuesday with the “CEOs’ view of the future” panel organized and moderated by David Nussbaum, the CEO of DBW’s owner F+W Media and the man who really dreamed up the idea of this conference. David will be joined this year by Marcus Leaver of Quarto, Karen Lotz of Candlewick, and Gary Gentel of Houghton Mifflin Harcourt. And Michael Cader and I will — as we have every year at DBW — moderate a panel to close the plenaries, “looking back and looking forward” with agent Simon Lipskar of Writers House; Harper’s new Chief Digital Officer, Chantal Restivo-Alessi, and Osprey CEO Rebecca Smart.

Among the presenters on the main stage who will be unlike what our audiences usually hear at a digital publishing conference will be Teddy Goff, the digital director for the Obama campaign, who will talk about targeting and marketing techniques that might serve us well in the publishing world; Ben Evans of Enders Analysis in London, who will tell us how publishing fits into the strategies of the big tech companies (Amazon, Apple, Facebook, Google, and Microsoft) that he tracks regularly*; ex-Macmillan president and now private equity investor Brian Napack, talking with Michael Cader about the investment climate in publishing; and Michael D. Smith, Professor of Information Technology and Marketing from Carnegie-Mellon, talking about a study he and his colleagues have done on the real commercial impact of piracy.

(We’ve also scheduled a breakout session for Teddy Goff so he can talk more about the Obama campaign for those in attendance who want to learn more of its lessons to apply.)

We’re also delighted to have gotten Robert Oeste, Senior Programmer and Analyst from Johns Hopkins University Press, to deliver his wonderfully insightful, entertaining, and informative presentation on XML, the subject so many of us in publishing need to understand better than we do. And we will after he’s done. (We’re also giving Oeste a break-out slot to talk about metadata which I’ll bet a lot of our audience will choose to attend after they’ve heard him on XML.)

Some authors have had remarkable success without help from publishers in the past year, but few or none more than Hugh Howey, the author of “Wool”, who has just signed a groundbreaking print-only deal for the US with Simon & Schuster. His dystopian futurist novel has sold hundreds of thousands of self-published ebook copies and rights all over the world and to Hollywood. We’ll have a chat with Howey about how he did it and we’ll be joined by his agent, Kristin Nelson, for that dialogue. Kristin will stick around to join a panel of other agents (Jay Mandel of William Morris Endeavor, Steve Axelrod, and Jane Dystel from Dystel & Goderich) to talk about “Straddling the Models”: authors who work with publishers but are also doing some things on their own.

We will have several panels addressing the challenges of discovery and discoverability from different angles. One called “Closing the New Book Discovery Gap” teams Patrick Brown of Goodreads with three publishing marketers — Matt Baldacci of Macmillan, Angela Tribelli of HarperCollins, and Rachel Chou of Open Road — and is chaired by Peter Hildick-Smith. That will focus on what publishers can do with metadata and digital marketing to make it more likely their titles will get “found”. Barbara Genco of Library Journal will share data on library patron behaviors and then helm a panel discussion with Baker & Taylor, 3M, Darien Public Library, and Random House exploring the role of libraries in driving book discovery and sales. Another session called “Making Content Searchable, Findable, and Shareable” introduces three new propositions from Matt MacInnis of Inkling, Linda Holliday of Citia, and Patricia Payton of Bowker, along with SEO expert Gary Price of INFODocket. Publishing veteran Neal Goff (who is also the proud father of Obama’s digital director) will moderate that one. MacInnis, Holliday, and Payton offer services that will help publishers improve the search for their books. Price will talk knowledgeably about how the search engines will react to these stimuli.

We’re covering new business model experimentation (with Evan Ratliff of The Atavist, Brendan Cahill of Nature Share, Todd McGarity of Hachette, and Chris Bauerle of Sourcebooks) where publishers discuss ways to generate revenue that are not the old-fashioned ones. We’ll underscore the point that we’re about changes caused by technology rather than being about technology with our “Changing Retail Marketplace” panel, featuring publishers and wholesalers talking about the growth of special sales (through retailers that aren’t bookstores and other non-retail channels).

The future for illustrated books will be discussed by a panel with a big stake in how it goes: John Donatich of Yale University Press, Michael Jacobs of Abrams, Marcus Leaver of Quarto, and JP Leventhal of Black Dog & Leventhal. Two publishers who have invested in Hollywood — Brendan Dineen of Macmillan and Pete Harris of Penguin — will talk about the synergies between publishing and the movies with consultant Swanna McNair of Creative Conduit.

We will have major US publishers and Ingram talking about exports: developments in the export market for books — print and digital. And we’ll have some non-US publishers joining Tina Pohlman of Open Road and Patricia Arancibia of Barnes & Noble talking about imports: non-US publishers using the digital transition to get a foothold in the US market.

One session I think has been needed but never done before is called “Clearing the Path” and it is about eliminating the obstacles to global ebook sales. That one will start with a presentation by Nathan Maharaj and Ashleigh Gardner of Kobo where they will enumerate all the contractual and procedural reasons why ebooks are just not available for sale in markets they could reach. And then Kobo will join a panel conversation with Joe Mangan of Perseus and agent Brian Defiore to talk about why those barriers exist and what might be done in the future to remove them.

Oh, yes, there’s much much more: audience-centric (what I call “vertical”) publishing; the changing role of editors; the evolving author-publisher relationship; and a conversation about the “gamification” of children’s books. David Houle, the futurist and Sourcebook author who wowed the DBW 2012 audience, will return with his Sourcebooks editor, Stephanie Bowen, to discuss their version of “agile” publishing: getting audience feedback to chunks before publishing a whole book.

We will also do some stuff that is more purely “tech”. We have a panel on “Evolving Standards and Formats” discussing the costs and benefits of EPUB3 adoption, which will be moderated by Bill McCoy of IDPF. Our frequent collaborator Ted Hill will lead a discussion about “The New Publishing IT Department”. Bill Kasdorf of Apex will moderate a discussion about “Cross-Platform Challenges and Opportunities” which is about delivering content to new channels.

But purely tech is the exception at Digital Book World, not the rule.

And purely tech won’t show up at all at Authors Launch on Friday, January 18, the day after Digital Book World.

Authors Launch is what we think is the first all-day marketing seminar aimed squarely at authors with a publisher, not authors trying to work without one. It is pretty universally taken as a given that authors can do more than they ever have before to promote themselves and their books and that publishers should expect and encourage them to do that. But, beyond that, there is very little consensus. What should the publisher do and what should the author do? That question is going to be addressed, in many different ways, throughout the day.

The Authors Launch program covers developing an author brand, author involvement and support for their book’s launch, basic information about keyword search and SEO, use of metrics and analysis, a primer on media training, when and how to hire a publicist or other help, and a special session on making the best use of Goodreads. We’ll cover “audience-centric” marketing, teaching authors to think about their “vertical” — their market — and understand it.

The faculty for Authors Launch includes the most talented marketers and publicists helping authors today: Dan Blank, co-authors MJ Rose and Randy Susan Meyers, journalist Porter Anderson, David Wilk, Meryl Moss, Lucinda Blumenfeld, agent Jason Allen Ashlock, and former Random House digital marketer Pete McCarthy.

We have assembled a group of publishers and an agent to discuss how an author should select the best places to invest their time from the staggering array of choices. (Facebook, Twitter, YouTube, Pinterest, etcetera.) That panel will include agent Jennifer Weltz of The Naggar Agency as well as Matt Baldacci of Macmillan, Rachel Chou of Open Road, Rick Joyce of Perseus, and Kate Stark of Penguin. Matt Schwartz, VP, Director of Digital Marketing and Strategy for the Random House Publishing Group, will conduct the session on metrics.

A feature of both our Kids show on Tuesday and the Author show on Friday are opportunities for the audience to interact with the presenters in smaller groups so each person can get his or her own questions answered. At Kids we’ll do that at lunchtime, seating many of our presenters at tables with a sign carrying their name so our attendees can sit with them and engage. At Authors Launch, we’ll be conducting rounds of workshops, crafted so that the authors can get help in their own vertical (genre fiction, literary fiction, topical non-fiction, juvies, and so forth), and on the topics of greatest need for them.

We are sure the week of January 15-18 will prove to be an energizing and stimulating one for all of us living in the book publishing world. We hope you’ll join us.

Digital Book World Week | January 15-18, 2013

Children’s Publishing Goes Digital | Tuesday, January 15, McGraw-Hill Auditorium
DBW Pre-Conference Workshops | Tuesday, January 15, Hilton New York Hotel
Digital Book World Conference + Expo | January 16-17, Hilton New York Hotel
Authors Launch | Friday, January 18, Hilton New York Hotel

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The Book Industry Study Group’s annual membership meeting on Friday concluded with a panel discussion among four industry executives who have leadership roles in the group. They are also four of the sharpest minds in publishing and they all had provocative things to say. Recollection of detail is not my strongest suit and I didn’t take any notes, but all of them said things that stuck with me and which struck me as ideas that deserve more attention than they get.

Dominique Raccah, the founder and CEO of Sourcebooks, made the now-obvious (but new to me that morning) point that we are going to have to streamline generating metadata in multiple languages to take advantage of emerging global markets.

Maureen McMahon, the CEO of Kaplan, which serves a very targeted audience, recalled that five years ago she was able to track her very discrete list of competitors and closely calculate her market share. But as an information-provider, she now finds competitors can pop up from anywhere.

Ken Michaels, just appointed President of Hachette Book Group USA, reminded us that 70% of the sales are still print. He said that we need to stop talking about digital as if digital is all there is; that just as media and consumer habits are converging so must the approach publishers take to running their business. He stressed building workflows around content, not product, so you can curate and compose once for all formats, and incorporating digital as a way of life, even in publicity and marketing, rather than having any stand-alone digital workflows. In other words, it is time to integrate digital, not treat it as a thing apart.

All great insights, but what I really took to heart was some simple wisdom from Tom Turvey of Google. Turvey is spending a lot of time outside the US these days, as Google Play opens in markets across the globe. He reminds us that we are way ahead of everybody else in digital change. That means that potential markets abroad are only in their earliest stages of development. He sees that the publishers in those markets –and we as well — need to concentrate on three things: standards, rights, and data.

Standards, rights, and data. These are the three elements which can restrain digital growth, or propel it. They’d also serve as a good short summary of BISG’s agenda. Turvey took the opportunity to say that every country needs a BISG, but not every country has one.

Standards, of course, are a community endeavor. It is not for any one publishing player to create standards on their own for everybody else. If you’re powerful enough, like Amazon, it might be in your best interest not to throw yourself wholeheartedly into participation in standards that make it easier for others to compete with you. But, as publishers well know, insufficient standards can cost a lot of money, rendering content for different screens or even subtly different applications of epub or Adobe.

The challenges with rights are, first, having them, and second, making sure a file’s metadata spells them out clearly. One of the the first rules I learned when I came into publishing decades ago was “acquire rights broadly, license rights narrowly”. That is practice which was unambiguously the wisest commercial course until our current and developing age of digital delivery. Now agents (or publishers) having licensed rights “narrowly” can cause books not to be available to customers who would be happy to buy them when they easily could be doing so.

Data is a combination of an industry problem and an individual publisher challenge. The digital age is presenting us all with new metrics if we can gather and use them: from websites and Twitter and Facebook, as well as from publishers’ sales. We are beginning to learn what marketing and social activities move the sales needle and we’re finding it isn’t necessarily the same for different kinds of books. BISG and AAP have joined forces to deliver BookStats, the most rational and accurate book industry sales data we’ve ever had in the US and perhaps the most accurate industry data in the world. Tara Catogge of Readerlink Distribution Services did an eye-opening presentation of what that database can do earlier in the show, but we’re still at the earliest stages of learning how best to use it and we’re as blind as we’ve ever been everywhere else.

Standards, rights, and data. Publishers could benefit by reviewing their practices and progress in all three areas at a senior level on a regular basis. My hunch is that some, including the ones who joined Turvey on that stage, already do.

Two of those BISG panelists, Raccah and Michaels, are among the “innvoators” presenting at our Publishers Launch Conference next Monday, 10:30-6:30, at the Frankfurt Book Fair. Dominique will be talking about two new initiatives from Sourcebooks and Ken will be explaining the value of SaaS — software as a service — to modern publishing IT departments, including some tools his team at Hachette has developed and are making available to the industry. Pub Launch Frankfurt will also feature a presentation from Noah Genner, who runs Book Net Canada — their version of BISG — about a survey of Canadian book consumers they’ve just done: more about data.

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In some ways, I think this year’s Publishers Launch Frankfurt show kicks off the next era of digital change in global publishing. The US and other English-speaking markets have established clearly that immersive reading — fiction and narrative non-fiction — is easily ported to screens for most people. In the past 18 months, changes in the UK book market have begun to resemble what we saw in the US, including Amazon’s dominance and bookstore shelf space shrinking.

While there are still many unanswered questions about how the English-speaking trade book world will look in a few years, I think the story of the next 12 months could well be more dramatic in non-English markets. The Frankfurt show is our most international; Americans are in the minority as attendees at this event.

We have packed 18 panels and presentations into our one-day Publishers Launch Frankfurt. (I like to keep things moving.) In keeping with the way digital change has taught us to think about the book business, we have two themes that are actually analogs for “content” and “context”.

Providing the “content” will be nine “Innovators”. The presenting innovators are publishing executives who are doing things inside their companies that are hard (or impossible) to find being done anywhere else. Yet.

Creating the “context” are a number of presentations on “Circumstances”. The context of the digital revolution differs by country, by language, and by time. What happened in the United States over the past five years offers clues, but not definitive answers, about what to expect in other countries over the next five years. We are exploring a wide range of circumstances that are defining the environment for publishing around the world in the future.

Both sets of presentations are extremely diverse.

We’re starting off the day with what I think will be one of the most impactful of the “circumstances” descriptions. Benedict Evans of Enders Analysis tracks the strategy of the five big tech companies whose activities are most likely to have an impact on publishing: Amazon, Apple, Facebook, Google, and Microsoft. He’ll describe the overarching objectives of each company and examine how book publishing fits into their thinking. The point will be to help publishers see how to take advantage of opportunities that will be created and avoid the pitfalls that will come along with the opportunities.

Jim Hilt, Theresa Horner, and new International Managing Director Patrick Rouvillois of Barnes & Noble will be talking about their company’s recent first move outside the US, launching the NOOK in the UK with local retailer partnerships. The UK will therefore become the first market outside the US to experience an initiative from the one company which, inside the US, has made a meaningful run at Amazon. If they can do it in Britain, then perhaps they can do it elsewhere as well. This is a “circumstance” everybody in the business will be watching.

Michael Tamblyn of Kobo will also speak. Kobo has opened in six major markets in the past year. They’re bringing an independent — but complete with devices, including new ones just announced — ebook retailing presence into many markets. The spread of the digital delivery infrastructure is definitely one of the changing circumstances that all publishers need to stay aware of and these two retailers are an important part of it.

The decline of print bookstores has been taking place for some time in the US, an effect not yet evident in much of the rest of the world. Peter Hildick-Smith of The Codex Group has been studying that, surveying book consumers about their purchasing decisions for a decade. He has data spelling out what the impact on sales and discovery is as bookstore shelf space contracts, which he’ll be reviewing for publishers to consider as they do their own forecasting about how fast bookstores will decline in their own markets. Hildick-Smith also has data about the reading habits of consumers on tablets as opposed to ebook readers which will be of great interest because so much more of ebook uptake outside the English-speaking world will take place on tablets.

We will have panels looking at two sets of emerging markets.

The BRIC countries — Brazil, Russia, India, and China — are watched by economists for emerging trends and we’re going to do the same. All of them are in the earliest stages of ebook uptake, but the beginnings are there in all four markets. We’ll have local representatives from each — publishers and retailers — to fill us in on the prospects and expectations in each of these countries.  The panelists will be Carlo Carrenho (PublishNews) from Brazil, Alexander Gavrilov (Book Institute) from Russia, Ananth Padmanabhan (Penguin) from India, and Lisa Liping Zhang (Cloudary Corporation from China.

We will also have a panel of leading Spanish-language publishing executives, chaired by Patricia Arancibia of Barnes & Noble, to discuss how digital change is playing out in the Spanish-language market. Spanish, like English, is the local language for many countries — more than 20 in the case of Spanish — and also has a very large market within the US. Digitization has been slow and there are unique issues having to do with the fact that control of copyrights is often housed in Spain, despite the fact that the biggest markets are in Latin America. Patricia and her panelists (including Arantza Larrauri of Libranda and Santos Palazzi of Planeta) will explore how fast that will change and when we should expect to see ebooks rising beyond the sliver of the market they have captured so far.

Michael Healy of Copyright Clearance Center is going to do a presentation on changes to copyright law and practice that may not be taking place where you live and publish but which could affect you where you do.

Noah Genner, their CEO, will report on the first fielding of a BookNet Canada survey of Canadian book consumers, the beginnings of a project that is planned to take place over the next couple of years. This may be the first intensive study of digital reading habits outside the United States so we thought it was worthy of a report to our global audience.

And a circumstance on every big company’s mind in publishing is how they will be regarded by the investment community as they navigate the digital transition. Brian Napack is now at Providence Equity Partners. Last year at this time he was President of Macmillan USA. Nobody is in a better position to discuss this topic than Brian and he’ll present on it at our event.

The innovative executives who will be navigating these shifting circumstances constitute the other half of our program. These speakers will be talking about initiatives that are often unique but are always pioneering. Our bet is that they are introducing a lot of practices that will be common in a couple of years.

Two of our innovators work from outside the English-speaking world but part of their story is that they’re not letting that cut them off from the biggest book-buying language.

Helmut Pesch leads the team that provides the internal ebook support for the German publisher Lubbe. But he’s using that position to pioneer. He’s teamed with a TV production entity to deliver a multi-media novel as a serial, launched an ebook first imprint, and is publishing original work in both English and Mandarin Chinese!

Marcello Vena oversees digital initiatives for the Italian holding company RCS Libri, which owns the book publishers Rizzoli, Bompiani and Fabbri Editori. Vena has started two ebook first genre imprints (thrillers for Rizzoli and romance for Fabbri) and is delivering those files DRM-free. He’s created a couple of very successful illustrated ebooks (this in a market where digital has barely cracked 2% of sales) and he also is trying out English-language publishing.

Stephen Page of Faber and Faber in the UK is building publisher- and author-services businesses while he innovates in his own publishing house. As an example of that, Faber has produced delivered two compelling apps for classic poetry: one on T S Eliot’s “The Waste Land” and one just released on Shakespeare’s Sonnets. And he’s building author communities that include live events and writing courses.

Rick Joyce, the Chief Marketing Officer for Perseus and their digital Constellation service, is exploring “social listening” tools, but with a twist. Joyce points out that working with these tools isn’t easy but he also is skeptical of the value which can be derived as they are often used: tracking the impact of social media efforts by a publisher. Joyce and his team are exploring whether the tools can be used to find the right marketing venues and approaches, down to the level of what blog comment streams to join and what nomenclature to use when they’re being worked. He will explain the tricky balance between being terribly specific in your search (like using the book title) which yields far too few opportunities and being so broad that the targeting is ineffective.

Anthony Forbes Watson is Managing Director of Pan Macmillan in the UK, part of the newly reorganized global trade division of Macmillan. Watson’s house is distinctly smaller than the four biggest UK trade houses (Random House, HarperCollins, Hachette, and Penguin) but much larger than any other player. Watson has reorganized his shop to get closer to both the authors and the markets. The evidence so far is that Pan Macmillan is proportionately outselling its competitors in digital; Watson will lay out the ways in which internal structural changes can lead to competitive advantage.

Rebecca Smart is the Chief Executive Officer of Osprey, a global publisher whose first vertical audience was military history. Since then, Osprey has executed acquisitions to put them into other verticals: science fiction, mind body spirit, food, and health. Her company is global and focused on audiences and she is building a multi-vertical publisher that will work with very diverse set of customers with a consistent approach and central services when possible.

Ken Michaels is the COO of Hachette Book Group USA. He’s also a big believer in SaaS: software as a service and he’s been rethinking and rebuilding Hachette’s internal technology structure in light of that belief. Hachette has also created some solutions themselves — among them, a capability to track metadata and ranks of books at ebook retailers and a tool for sharing content on Facebook — that they are making available as SaaS services themselves.

Charlie Redmayne is the CEO of Pottermore. He believes they’re building the digital publisher of the future and that a key element of that is to go where the audiences are: every device or channel that commands eyeballs is in his sights. Of course, Pottermore was built on the back of one writer’s amazing fictional brand and world. Redmayne believes what they’ve built might be applicable to other worlds from other authors. And that part of his presentation might get a lot of publishers and agents in the audience thinking what they have that might apply.

Dominique Raccah is the founder and CEO of Sourcebooks. Dominique is an indefatigable experimenter. She’s developed a poetry vertical. She’s experimented with “agile book creation” which invites the author’s audience to participate in creating the book. Dominique does more experiments before breakfast than most publishers do in a year. I put her on this program “on faith” because she told me she’s got 2-1/2 experiments to discuss that support her conviction that publishers have to completely rethink their businesses. (Today on a listserv she mentioned that she has “five startups” taking place internally!) Maybe I’ll find out exactly what she’s going to talk about at the conference before we get there, but I haven’t found out yet. But I’ve never been disappointed by Dominique and she says she’s more excited about what she’ll discuss at Publishers Launch Frankfurt than she has ever been about anything she’s done before. I am confident that we’ll be glad to hear what she has to say and all the other innovators will feel they are in very good company.

As we usually do at Publishers Launch events, Michael Cader and I will be opening the show with stage-setting remarks and doing a quick wrap-up at the end as well as popping up during the day whenever we think we can be helpful.

We got Peter Hildick-Smith, Rick Joyce, and Marcello Vena to do a webinar with us previewing what they’re doing at the event. Check it out! And our friends at the Frankfurt Book Fair did a little session with me talking about the conference as well. Take a look.

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The dizzying pace at which US consumers were switching from print to digital couldn’t last forever. Based on the numbers being published by the AAP, with a huge assist in interpretation by Michael Cader at Publishers Lunch, it seems that the slowdown has become very noticeable in the past 12 months.

Between late 2007 when the Kindle came out and late 2011, ebook sales doubled or more every year. Since September 2011, during which Cader reckoned sales were double the year before, the monthly numbers are showing much lower (and declining) year-on-year growth. The April numbers showed only a 37% increase from the year before.

I’ve been pondering this question about when ebooks uptake would slow down for a long time. In March of 2010, 17 months ago, I wrote that my hunch was that the switchover “won’t start slowing down until ebook sales are 20-25% of what a publisher expects on a new title.” And I guessed that would occur before the presidential election of 2012. That feels reasonably consistent with what appears to have happened.

Cader also cites reports from Penguin and Simon & Schuster to document the slowdown. Penguin says ebook sales growth was about 33% in the first half of 2012. And Lunch reports that Carolyn Reidy, CEO of Simon & Schuster, told them she expects about 30% growth in ebook sales during 2012. That would almost certainly constitute their (or anybody else’s) fastest-growing sales channel, but it sure isn’t the annual doubling and tripling (or more) we had seen for several years.

A couple of weeks earlier, Cader dissected the BookStats reporting of publisher sales numbers. As longtime readers of this blog know, what I think is the important metric to watch is “store sales versus online sales”, rather than “print versus electronic”. Store sales are all print, but online sales are not all electronic. The reason I think the channel distinction is more important than the format distinction is because scale is far more useful to deal with retail stores than it is to deal with any online account. The reasons are two: inventory and logistics.

BookStats reports that publisher-direct sales to online retailers — this includes both print and digital, but does not include sales that went through the wholesalers — were about 35% of the total of sales to store and online retailers combined. Online is said to have risen about 35% in the past year and brick stores have declined about 12.6%. My rough math says that the combined total of the two was pretty close to equivalent — down about one percent. Since ebook sales are rising and ebooks are generally cheaper than print books, this passes for “flat”.

The other thing to pay attention to is the difference in ebook sales by type of book. Based on anecdotal evidence, I believe that genre and commercial fiction sales might be approaching half ebook already. (BookStats reports that unit sales of all fiction are currently 64% print and 34% digital.) Narrative non-fiction is about half that. Illustrated books of all kinds are slivers of that.

There are many things we don’t know.

We don’t know how much of the sales growth decline in the past year is due to the publishers’ success at driving up ebook prices. To the extent that’s the cause, we might see the pattern change again when (as I expect) the DoJ settlement is approved and the shackles come off Amazon’s pricing policies.

We don’t know how much of the sales growth decline in the past year might be due to the consumer switchover from dedicated ereaders to multi-function devices that offer them other media and games — and email for that matter — to compete with books. To the extent that’s the cause, the slowdown trend might well be extended because it is likely that a lot of people will switch from eink readers to multi-function devices as those devices continue to get cheaper.

We don’t know to what extent store traffic is affected by the continuing shift of bestsellers, particularly in fiction, to digital consumption. In the short run, there is probably a positive impact on the display space and sales opportunities for illustrated books and children’s books. But, in the longer run, how many stores can survive if the bestseller business continues to move away from them?

We don’t know whether mass merchants will continue to see books as worthy of their shelf space. They sell a lot of genre fiction, which is the most challenged by inexpensive independently-published (and not all of those are self-published) ebooks. And they can switch square footage from one thing to another at great speed and with no sentimentality at all.

But, all in all, the slowdown we’ve seen is good news for the legacy publishing establishment and it will be better news if the trend continues. Anything that slows the decline in brick store market share and the rise in Amazon’s buys time for big publishers and competing retailers to adjust their infrastructures and build new business models that are more effective for the future.

Unfortunately for them, the denouement of this round of DoJ activity is about to give things a sharp shove in the other direction.

If understanding new business models and other new ways for publishers to do their business is important to you, our Publishers Launch Frankfurt event on October 8 should be on your calendar. We are featuring a number of Publishing Innovators from around the world: executives who are inventing those new business models that will enable publishers to thrive in our new digitally-influenced publishing environment.

This conference is worth a post of its own, and it will get it very shortly. But the bottom of this post felt like a good place to point that we are going to feature many outstanding industry- leading publishing executives (and not just from the English-speaking world) who are doing things almost nobody else is. Yet.

And we’ve changed our event time from the normal 9 to 5 to 10:30 to 6:30 to allow people to arrive in Frankfurt on that Monday morning and not miss any of what will be one of the most illuminating events we’ve done.

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BookExpo America, trade publishing’s industry-wide gathering, just completed what must be considered another successful year at Javits Center last week. Attendance was pretty much what it had been last year and the lines for autographs on the convention floor certainly gave off the feeling of enthusiasm and excitement that publishers want to see.

Convention roundups are best delivered by people like Laura Hazard Owen and my Publishers Launch partner, Michael Cader, who make a real effort to take in the breadth of what is going on. I, on the other hand, have my meetings and chats with friends that seem to fill up the days so my impression of the overall is just that: an impression. An ad hoc impression.

One thing that seems pretty clear is that my forecast for the future of BEA from 2009 was unduly pesssimistic. I like to get to what I think is the heart of the matter, but in this case I was overly simplistic. I got it right that bookstores would continue to decline but I got it wrong to think that would doom BEA within three or four years. Although other retailers stock books more than they used to, there are nowhere near the number of opportunities for publishers to talk to customers that there were even in 2009. But publishers are that much more interested in talking to any source of shelf space that they can and, in fact, non-book retailers often aren’t hit by the field sales forces.

So there continues to be sufficient reason for publishers to exhibit to keep them coming (albeit with smaller stands and less staff than the big guys used to bring). And that brings a whole slew of other players, including the ever evolving set of companies with digital propositions looking to get the attention of publishers large and small.

Aside from our Publishers Launch conference, which made lots of news and was an altogether satisfying event from an organizer’s perspective with a number of really fabulous presentations, I had a handful of takeaways from BEA 2012.

1. Metadata is still a mess. For a BEA panel outside Publishers Launch, we reunited the incredibly engaging team of Newlin and Toolan to discuss metadata. Bill Newlin of Avalon, a division of Perseus, and Fran Toolan, the “Chief Igniter” (CEO) of Firebrand Technologies, know it all about metadata and are both passionate and extremely entertaining in discussing it. I heard from somebody who saw the session or talked to them afterwards that they might be getting bored with presenting on the subject. I checked in with Bill afterwards and he said he just had to freshen up the presentation; it remained important and he wouldn’t stop.

Then I talked to Karina Luke, who had spoken about metadata for us in London last year when she was at Penguin and who now is in charge of Book Industry Communication (BIC), the BISG equivalent in the UK which has, among its responsibilities, the monitoring of industry complicance with metadata standards and certifying publishers for competence. “Is this really still a problem?” I asked her. “Yes.” “Even among the big publishers? Don’t they have it all straight?” “No.”

Since metadata has, as Karina makes clear, literally replaced catalogs and sales reps as the most important and mission-critical source of information about a publisher’s books, this is a bit shocking. We had Jonathan Nowell of Bookscan do a presentation at Pub Launch Frankfurt last year which demonstrated pretty emphatically the relationship between metadata and sales. He’s repeated the presentation, first for us at Digital Book World, and then under other auspices. Apparently not enough publishers have seen it.

2. Still, nobody reports selling illustrated books effectively as ebooks. I have asked the question over and over of every illustrated book publisher I know. One Big Six house that is doing ebooks for all the titles in one of their divisions with a lot of illustrated titles, told me that most of the time sales of the digital edition are in the single digit percentages of the total sale. Very successful illustrated ebooks might do 15% of the print sale. For immersive reading, that percentage is a big multiple of that.

Illustrated books as ebooks have not yet demonstrated that they will work in the marketplace.

3. Still, nobody reports a formula that can deliver repeated commercial success with enhanced ebooks. We all know about a few instances that have worked, but, so far, no publisher has come up with a formula to make enhanced ebooks commercially sound propositions.

We introduced Ron Martinez’s “Aerbook Maker”, a cloud-based technology that makes it easy to build complex ebooks and apps and cuts the cost of doing so dramatically. Martinez’s technology will definitely reduce the cost of experimentation and allow a lot more titles to hit the marketplace. Maybe that can jump-start a business both by making the costs go down and by making it easier for the creative people, including the author, to engage with the technology.

There certainly isn’t a business yet.

4. Publishers still haven’t focused on creating rights databases (which I identified as the biggest problem of the decade over a year ago.) This is a knotty problem for publishers. Sales of books are, in general, flat or down. Sales of rights, particularly in small bits and pieces (chunks), are going up. But without rights databases, the cost of those transactions can often eat the all revenue.

Exactly what to do is an extremely complex problem for any house to tackle and requires some high-level consideration, planning, and resource allocation. But I think it is obvious that the correction must begin with properly databasing the rights in current contracts as they are signed. Even this is apparently not happening yet in most places, according to the “support” industry that would help publishers change this.

Meanwhile, the “in” baskets in the permissions departments will continue to be piled higher and the number of unattended=to opportunities that might have been really remunerative or helped with the marketing of the book will be a subject to be considered at some future time.

(I recall now that my wife, Martha Moran, increased sales by some huge multiple in the 15 months she was doing special sales for Crown in the late 1970s. Her singular innovation was to create a set of form letters that allowed her to answer every request within a couple of days. The impact was immediate. It might well be the same when some publisher creates such a policy for its Rights and Permissions requests.)

5. The problems that distributors are facing with ebooks in the public library market are being duplicated in the K-12 library market. People in that space tell us that they suffer from the same concerns on the part of publishers that keep some players out of the public library market. Is there any way to offer ebooks in school libraries that won’t cannibalize sales of multiple copies in school settings? That’s as much a conundrum as the public library one, but it gets a lot less attention from the public or the publishers.

6. The slowdown in ebook share growth got a bit of conversation. Did I believe it was real? Sure, it is. And it is probably a very natural state of things. Before ebook reader prices plummeted, which they have really done in the past year or two, the readers only made real economic sense to people who read a lot of books. The first mover advantage Amazon gained with Kindle (which was the first device that was easy to load and also hooked up to a lot of titles) was huge because they self-selected the heaviest readers with their pricing. I’ve never seen figures that would prove it, but I’ll bet Nook also has found that ebooks sold per new device is declining from what they saw at first.

Another reason for this, besides the bias of heavy readers to be early adopters, is that so many devices being sold now are replacements. There is a tendency to “load up” on a new device. That’s not necessary on a replacement, particularly a replacement within the same retail ecosystem. So device sales have lost their power as a leading indicator of ebook share growth.

7. The most stimulating and exciting conversation I had at BEA was with Marcello Vena, the director of digital business at RCS Libri, a large book publishing group that owns Rizzoli and Fabbri Editori. RCS Libri is part of RCS Mediagroup, one of the largest EU media holding companies. They own a lot of media businesses including newspapers, magazines, radio, and online advertising.

RCS Libri is doing a large number of innovative things with ebooks, both illustrated and straight text. They’ve done an illustrated ebook on museums that has been a huge success in Italy and will be delivered in English by Rizzoli. They’re starting two new vertical imprints dedicated to genre series in Italian: Rizzoli Max for thrillers from Rizzoli and Fabbri Editori Life for romance novels from Fabbri Editori. All titles will be issued simulaneously as inexpensive hardcovers and ebooks starting this week. The initial list of the thriller series includes a book by my favorite self-published author, John Locke.

RCS is thinking globally and also innovating locally, including in the way they manage promotional pricing of their digital products online. Of course, what’s stimulating for me will probably be stimulating for an audience as well, so I’ve booked Marcello Vena to speak at the Publishers Launch Conference in Frankfurt on October 8.

I turned 65 during BEA. People older than I am are getting harder to find at industry events. But I really enjoyed seeing two of them at BEA.

Martin Levin is in his 90s. He went to law school after he retired from his publishing career, which concluded after he was chairman of Times Mirror Publishing, which then owned Abrams and New American Library. For the past two decades he has done M&A with the law firm Cowan, Liebowitz, and Latman. Martin greeted me with a big smile saying how happy he was that my career has gone so well. But he pointed out, accurately, “you’re not nearly as smart as your father.” Then he recalled some of Dad’s accomplishments, including putting in a vendor-managed inventory program at Doubleday in the 1950s.

Joe Friedman was a new sales rep at Doubleday when that program was instituted. He went on to a career leading sales at Penguin and then working for the ABA. He’s 76 now and hasn’t been in the business for a decade or more. He came in to Manhattan from Long Island on two separate days just “to see if anybody remembers” who he is. I was glad to see him. I wish I’d gotten his email address. I hope he found a few others with whom to discuss old times.

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