Publishing History

I was extremely fortunate in my “choice” of parents. I had both admiration and affection for them, and I always had a great time just shooting the bull with my dad, Leonard Shatzkin. He was a real visionary about the publishing business and was also very witty and cogent. A great deal of what passes for my insight is really just a recycling of his.

He died in May of 2002. Until the last six months or so of his life when the heart failure that killed him so weakened him that he couldn’t really think anymore, he was still working hard on what he always considered to be the most important commercial challenge for book publishers: how to manage the inventory in retail locations. In fact, he was developing a system he hoped to commercialize as a solution for independent stores. I didn’t want to say “what independent stores?” to him back then, even though it was already obvious to me that their existence was seriously threatened. Dad had shaped his view of publishing during the 1950s, when the industry was near the front end of what was nearly half-a-century of unfettered growth.

That period of growth was over by 2000, and those of us who were trying to measure the trajectory of digital change in the early 2000s couldn’t avoid seeing it. Dad might have seen it 10 or 20 years earlier, but he was intellectually and emotionally incapable of accepting it in the last few years of his life. In fact, while taking control of the inventory in independent bookstores had been the key to the growth Dad fostered at Doubleday in the 1950s and in building the Collier Books imprint, which he created, for what we now call Macmillan I in the 1960s, it didn’t present the same level of opportunity in the 2000s. He had been right for many years about this, but he wasn’t anymore.

Another immutable truth in my father’s picture of book publishing which also turned out not to be permanent was his belief that book publishers should just keep expanding their lists, pretty much without limits. When Dad launched Collier Books by doing 600 titles a year in 1962, the entire industry only produced about 10,000 titles. In Dad’s time, it was probably true that most books big houses did contributed to profits, so the more titles you did, the more profits you made. Tom McCormack, who was a protege of Dad’s in the late 1950s and then went on to a long and successful career as CEO of St. Martin’s Press (now part of Macmillan II), attributed much of his success and St. Martin’s to Tom’s own recycling of Dad’s insight.

There is this beast in publishing known as the “title P&L.” The “title P&L” proceeds from the mistaken premise that titles, standing alone, deliver profits or make losses. In fact, that’s not true, because a substantial chunk of a publishing house’s costs are not title-specific; some costs are not really attributable in any sensible way.

The way “title P&L”s normally work is that “overhead” — rent, salaries, etc. — is figured as a percentage of sales (which, if you look back to last year, is, indeed, a calculable number across any company.) By “distributing” the unattributable costs that way, the logic says, you make sure that each book covers its “share” of the costs of keeping the doors open. But, as McCormack pointed out many times over his career, the rent didn’t go up because he signed a new title and it was nonsensical to charge each title, let alone each sale, for the rent.

Dad had a very succinct and persuasive way to explain the folly of the “title P&L” logic. What he suggested is that every house do a recalculation of their overall P&L at the end of each year. To do it, they should take out every title that failed to earn back the overhead charge (usually somewhere between 35% and 45%) because those had, by the internal logic, “lost money.” Surely, if you take out all the titles that lost money, you would see your overall calculation of profits rise. Right?

But it never does, it always falls. Why is that? Because most of the titles deemed to have lost money by “title P&L” logic actually made a contribution to overhead. That is, the direct revenues attributable to that title were greater than the direct expenses charged to it; they just weren’t sufficient to be scored as profitable when the overhead tax was deducted. But if you subtract all the books that earned 6% or 10% or 19% or 34% margin on sales, you subtract actual dollar contributions to overhead and profit.

Important point: overhead and profit are both produced by gross margin on sales. When enough margin has been generated to cover all the overheads, the margin becomes profit. So titles don’t earn profits or losses, they contribute more money or less to overhead and, in some cases, actually don’t recover their direct costs. The titles that don’t recover their costs clearly have lost money; all other titles contribute to overhead and, if it is covered, to profits, but they aren’t, strictly speaking, profitable in and of themselves.

All that was true in Dad’s day and is still true today. What has changed (I think; I haven’t actually done the analysis with a real house’s numbers) is that the percentage of titles that don’t even recover their direct costs is rising. It is actually getting harder and harder to publish new titles successfully, even if the standard of success is lowered to “recovered all costs” from “delivered its pro rata contribution to overhead.”

That’s because each title published today is facing a much more challenging commercial environment than each title published two, three, four, or five decades ago. Each title competes with more titles in the marketplace and more new titles coming into the marketplace: print-on-demand and online used books have snared a great deal of market share that used to be available only to new titles and backlist kept alive in print-run quantities by publishers. And, for the past 10 years, each new title is coming into a marketplace that has less shelf space available for books overall than it had for the last title.

So the “keep publishing more and more” paradigm that Dad believed in and that McCormack credited with St. Martin’s growth may not actually work anymore. In fact, any sentient publisher today would have to look at their output regularly to recalibrate what new title publishing is actually profitable. I expect that analysts in every major house are slicing and dicing their lists, trying to figure out whether they can discern — by level of advance or subject matter or by imprint or editor or agent — which bets will return the cash invested and bring profit to the house.

We can assume those analyses are being done, but can we assume they’re being done right? Without any inside view of the details (and I don’t have one), we’ll assume (hope) that the crude application of a single overhead percentage to each title is not the standard for analysis. If it is, the house doing that will almost certainly be led to erroneous conclusions, just as Dad and Tom pointed out they were if they saw a book that contributed 30% margin as “unprofitable” and would think they’d be better off not publishing it.

The big publisher of 2010 has another problem besides the reality that new titles are harder and harder to launch to any standard of acceptable return. They also have to feed a machine built to handle a certain volume of printed books when the decline of print book sales is being accelerated by the shift to digital. The additional margins in digital (which are being produced as long as prices can be maintained) are not very helpful if they need to be diverted to pay for warehouse space, field sales forces, and higher unit printing costs because there is less print “throughput” to support them.

Big publishing management is aware of this challenge; it is part of what drives up the value (and prices) of big brand franchise authors. The big authors are still the fastest way to guarantee the volume of print output and sales necessary to fill those volume-guarantee contracts with the printers, absorb the warehouse space, and cover the cost of calling on accounts that sell print only. And look at the irony. With less volume, unit costs per book go up, which reduces total gross margin. And if warehouse and sales organization costs are fixed (they aren’t but it is hard to adjust them quickly, the way you can cut a press run or a marketing spend), then the percentage of sales they will consume will go up. So much for calculations of overhead as a percentage!

The big variable publishers have to deal with today is marketing cost. The most common rationale for list-cutting is that it will allow a greater amount of marketing attention to the books that are published. But that articulation actually begs the question, because marketing resources are variable. If you add more, you increase the overhead nut you have to cover before you get to profits. And if you reduce those resources, then you’ll be chasing your tail trying to put more marketing effort behind each title.

The analysis of how to cut has to be done; it is pure insanity for publishers to keep cranking out new titles if they are losing on many of them. Some of the ones they lose on have the potential to be big but just don’t make it; some aren’t even seen to have that potential. But the ultimate answer is not in how or how much a publisher can reduce title output, but in how they focus it. That’s the secret to reducing marketing costs and it is something we will certainly explore in another post someday.

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This post contains a reference to our next conference effort: this year’s Making Information Pay for the Book Industry Study Group. There is a survey associated with this conference about how processes and job descriptions are changing that we really hope everybody employed in a publishing house — particularly those people involved in editorial, production, marketing, and sales — will take. If you’re employed by a publisher, please respond to the survey!

Even though I personally have concerns about the precious money that could be wasted on “enhanced ebooks”, I know that we’re going to see an explosion of interest in them and a huge escalation of investment in them in the next couple of years. That’s why I’m working on a new project called Enhanced Ebook University (EEBU) about which there will be much more to say in the next few weeks.

The idea behind EEBU is, to twist a quote from Mark Twain, “everybody’s talking about enhanced ebooks but nobody is quite sure what they are.” The first task of EEBU will be to survey the possibilities of what can be done and how it can be done. The process of building the outline for the White Paper that will be part of this project has uncovered a lot of great ideas that give me some renewed hope that enhanced ebooks can be more useful, and more supportive of the immersive reading experience, than were the CD-Roms we created 15 years ago.

One thing we’re hearing often enough now so that it is becoming a new cliche is that making enhanced ebooks is “like producing a movie.” The point is that there are many creative efforts that need to be integrated. This all makes me nervous for publishers. This is not their skill set. This is CD-Rom land. This is an invitation to spend enormous sums of money creating products that will never earn back their costs.

Now what I’m wondering is whether the enhanced ebook could lead to the resurgence of a diminishing breed: the (enhanced e)book packager. It may be already happening.

Starting in the 1960s and famously led by Paul Hamlyn, who consecutively created and then sold packagers Hamlyn and then Octopus, the UK-based packagers of heavily-illustrated books intended to be delivered in multiple languages became a critical component of commercial book production worldwide. The “packaged” book had a number of requirements that challenged publishers. They were illustration- and design-intensive; they required large amounts of subject and photo research that then needed to be rendered in a consistent and (for each title) formulaic way; and they required an understanding of design and language requirements so that they could be printed for different language markets with just a black plate change. (Some languages consistently take more characters to express the same thought than others and knowledge of those details was a component of the packagers’ expertise.)

Packaging evolved over the years. Some packagers, like Dorling Kindersley and Octopus, went for the greater margins of being publishers. With the greater margins, of course, also came greater risk as they invested in books, rather than being hired hands creating them on the back of a publisher’s firm order for copies. (One major packager — Quarto — evolved into a bifurcated company that is half-packager and half-publisher.) As the bookstore chains and other large customers like the mass merchants grew, they sometimes went directly to the packagers at Frankfurt, rather than waiting for a publisher to buy the book and offer it to them. That disintermediation reduced cover prices for the packaged books in those outlets which put further pressure on any attempts by publishers to sell the books in the remaining parts of the market.

Packagers existed for a reason: they added value. They organized themselves differently from publishers, focusing on complex project management challenges that publishers didn’t want. They set up important relationships, with Asian printers and with photo stock houses, and developed skill sets, for templated design and efficient assembly of books from multiple component parts, that publishers didn’t have.

So today we have ScrollMotion (which acts, in many ways, like a publisher), Brad Inman’s Vook in the United States and Peter Collingridge’s Enhanced Editions in the UK and, according to Peter Meyers — a veritable font of knowledge on this subject that I just tapped for EEBU — literally hundreds of others that now call themselves “app developers” offering up the equivalent of book packaging services for enhanced ebooks. These entities probably have a bright immediate future; they can do things that publishers will find themselves highly challenged to do for themselves.

In these still early days of developing the EEBU idea, it had already occurred to me that agents were going to be playing in this sandbox. When I first looked at Blio, it seemed immediately to me that authors had a key role to play and Blio’s very intuitive toolkit made it possible for them to do that. I included an agent in my initial round of readers for the EEBU White Paper outline because I believe that  before very long big agents will be hiring staff to help their authors execute enhanced ebooks. Meyers, who seems seems to have done more thinking about this subject than anybody else I’ve met (I’m meeting Collingridge next week at Tools of Change), also posited that agents could become the new packagers in the emerging enhanced ebook landscape.

One other point has arisen repeatedly in our early research for EEBU and also touches on another upcoming project of ours: the next BISG Making Information Pay conference that we’re organizing which, this year, is on “Points of No Return.” (That’s the one I want publishing company employees to take the survey on.) PONR is trying to assess how much the workflows and jobs will change in editorial, production, marketing, and sales as the digital revolution takes hold. That project intersects this discussion: when we make ebooks first or enhanced ebooks often, will the required skill sets change so much for editorial and production people that the current incumbents will be unqualified?

At least one expert I’ve talked to thinks they will be. A friend who has worked in trade publishing but who is now oveseeing vast programs that create college textbooks says that the editorial skill sets that work for print alone don’t seem to port to multi-media. I have heard this before. When we were doing research for the BISG conference in 2008, a digital operator at Wiley made a very similar observation.

The use of outside packagers for ebooks might not work as well as it did for illustrated books twenty and thirty years ago. Packaged books, generally, did not have single authors or, if they did, the author was secondary to the idea and to the package. In fact, the author was usually hired by the packager that had the idea rather than the author developing and pitching the idea, which is how the agented-author book usually works with publishers. That argues for the agent-as-packager model.

Or it argues that some kinds of enhanced ebooks — the movie-like ones — won’t be the purview of publishers at all. I saw somebody suggesting an enhanced ebook of Avatar. Good idea. I had the same idea. But the way I’ve been thinking about it is that it will come from the film producer. It would be a lot easier for somebody working for James Cameron to pull five minutes of movie clips and 100 stills and hire somebody to turn the script into a ten thousand word narrative than it would be for somebody working for a book publisher to do this. Why would anybody think a book publisher would be needed for a tie-in of this kind in an app and enhanced ebook world? The publisher was needed for thebook tie-in because the publisher put the product on store shelves. Publishers have no advantage over movie studios for access to the App or Kindle stores.

On the other hand, there are a lot of enhancements to ebooks that aren’t so movie-like and which would be more like what an author or publisher could provide expertise to do better: character description capsules; background material about a person, place or thing; back story narratives that would interrupt the flow for most people; links to sources or further information. It could be that the Baker & Taylor Blio tool, and other things like it that are coming along, will enable an author and editor to accomplish a lot of that. They can even mix in the video. But it wouldn’t make them qualified to shoot it or even curate it, let alone negotiate for any rights.

That’s the kind of thing we’ll be exploring in the EEBU project.

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One thing that makes trade publishing companies a bit confusing to outsiders is that they’re all organized a little differently. I remember years ago when the great editor, the late Alan Williams, was running a small general trade house near the end of his career. At one point, Alan’s sales and marketing director came to him and said, “I’d like to have publicity, which now reports in to ‘publishing’, report to me.” And Alan said, “fine.”

Then a few months later, the sales and marketing director said, “I’d like to have subsidiary rights, which now reports in to ‘publishing’, report to me.” And Alan said “no.” Alan’s logic was: “I need the capabilities of subsidiary rights reporting to me to make acquisition and product development decisions.” (Those were clearly different times, when book club and paperback sales potential could affect an acquisition decision, which they almost certainly wouldn’t today.) But, even then, Alan recognized that a different editor-publisher doing different books might look at it precisely the other way around.

In an ideal publishing world, the vision of a book and its market promulgated by an author and “gotten” by an acquiring editor, will guide all the work done by (in large houses) legions of people to develop the book’s editorial quality and presentation in any form, its “messaging” for marketing, its pricing, and its ultimate merchandising and delivery to the public.

I have observed for years that “each book published presents the opportunity to make an unlimited number of decisions, which must be resisted”. In big houses, those decisions are often made by committee. It creates a lot of meetings; more meetings than anybody can stand. That’s why good publishing management is constantly trying to delineate the lines of authority for decision-making because just about everything can become the subject of a cross-functional committee, if you let it.

Which raises the question of how you do introduce cross-functional ideas to a publishing house at anything other than the CEO or COO level, a strategy which has its own limitations. On Friday, we had a company in our office seeking our advice about how to advance their proposition. They were a large Indian printer with strong capabilities bolted at both ends: prepress services that included XML workflows and content conversion and complete warehousing fulfillment services, down to the single copy level. They could see all sorts of problems they could solve for publishers that would reduce costs and grow sales, particularly with supply to Africa, which is a problematic but growing market.

They had already engaged one of the most senior and knowledgeable consultants in the industry to help them. He just couldn’t find the “right” person to talk to in each house. Efficiencies that result from more sensible linking of prepress to printing, or printing to warehousing and fulfillment, will fall in multiple bailiwicks in any publisher of consequence. He called us; we called in two other senior consultants who might be able to help. It was a sales development meeting for all of us (that’s consultant-speak for “an uncompensated opportunity to help somebody in the hope that work might result from it”.) But none of us felt the integrated services and cost savings would be easy to sell because of the structural impediments. The best advice that came out of that meeting (and it wasn’t from me) was “sell them that you can grow revenue in Africa; revenue enhancements are easier to sell than savings.”

We’ve been helping a client called SBS Worldwide tackle a similar problem. The label most publishers would put on them is “freight forwarder”, but because they are entreprenurial, aggressive, and creative out-of-the-box thinkers, they’ve built capabilities that make them much more than that. By forming a partnership with a big company in China, they have put freight-forwarding capabilities (which, standing alone, consist merely of commissioning the transport companies to move goods — usually by land, then by sea, and then by land — and keeping track of where the goods are throughout their journey) into the same service offering as warehousing, pick and pack, splitting and combining shipments, and handwork like stickering or prepack assembly. And they deliver these services at Asia prices, not Western prices. SBS wrapped it all up with a great web-based reporting system that “sees” the goods from end to end any way you want to, tied a ribbon around it, and called it eDC for “electronic Distribution Center.”

The capabilities this offers a publisher — with no capital investment — doing a lot of printing in China for the American or European markets are enormous. They can consolidate shipments from four printers, split off 700 separate packages for the Barnes & Noble stores, the shipments to the top five distribution center customers, and 200 review copies (with a press release folded in), and send each its most efficient way directly from Asia.

And they can hold books in Asia if they aren’t needed right away and the publisher’s warehouse is full or would like them “metered” in. I am aware of two major houses who have expressed warehouse space pain within the past year. I don’t imagine asking for cash for more warehouse space would be well received in the current business environment.

And eDC can customize looks at those shipments so that each stakeholder inside or outside the publisher can see their own view: their distribution center, their customers’ distribution centers, their sales people, and their editors. This can take an enormous communications burden off their organization.

The challenge SBS faces is that the freight forwarder is viewed as the most commoditized and least important component of the supply chain (they don’t absorb much of the budget compared to the other costs of delivering the inventory). Many publishers just let the printer “deliver” to their warehouse (so the printer may be choosing the freight forwarder). In that case, the production director is “buying” what SBS is selling, and it isn’t crazy that production’s first instinct is to let the printer handle it. (After all, they’re trying to choose the lowest “landed price” for the book, aren’t they?)

Some larger houses have a “supply chain management” function, which takes a broader view. But, even there, vested interests come into play. Does the house need to continue showing “throughput” to justify distribution center fixed costs? Does the supply chain department or production department even want to develop a routine involvement with marketing functions like review copies and sales interactions like delivery to Barnes & Noble stores?

Print book publishing is shrinking because of the alternatives being offered by technology. Sometimes technology can turn that shrinking into an advantage by collapsing functions, or reconfiguring the relationship between departments. But publishers are structurally resistant to entertaining propositions that could do just that. There’s no widely applicable solution to this problem except to have an energetic COO that looks for solutions with a broader organizational perspectives that her functional heads might resist.

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Is this where I came in?

In the early 1990s, the computer manufacturers and Microsoft were doing everything they could to persuade businesses and consumers that they really, really, really needed CD-Rom drives. That Microsoft would benefit from them was very clear; the software they were selling was taking more and more diskettes to deliver in those pre-broadband, pre-Web days when all software was “shrinkwrapped.” If computer owners could take their new software on CD-Roms, the cost of delivering the product would drop dramatically.

Only a year or two before, Bob Stein had developed what we can now identify as the first “enhanced ebooks”. His company, Voyager, introduced the “Expanded Book”. These were the first efforts to use the book as the foundation to do something much more ambitious: linking in pictures and sound and video and databased information. No web links yet, because there was no web yet, but the Voyager Expanded Books really foresaw the possibilities.

Microsoft encouraged publishers to build on the Voyager Expanded Books example with CD-Roms, and, indeed, the Voyager product itself moved quickly from a diskette-based product to a CD-Rom, which gave it a multiple of the digital space to add content.

Publishers at that time had recent experience with new product forms. In the early 1980s, a few had experimented with software publishing, but that was quickly seen not to work and the publishers who tried it, like Wiley, pretty quickly got out. In the mid-1980s, audiobooks first came on the scene, however, and their acceptance, fueled by the ubiquity of tape players in cars and the relatively new Sony Walkman family of portable cassette players, was very rapid. With the encouragement of Microsoft and the hardware makers promising that all computers would soon have CD-Rom drives, many publishers jumped into what we can look back and see was an enhanced ebook business with both feet.

It turns out they jumped into an empty swimming pool. Many legs were broken.

The whole idea that people who wanted a cookbook needed video in the middle of the recipe or that people would “read” a book on a desktop computer because of sound effects in a CD-Rom version always seemed like a stretch to me. Sometime in the middle of the CD-Rom craze, I learned that McGraw-Hill had a big animal encylopedia on which something like 60% of the cost went into the sound. This was for a high-priced professional product. This made no intuitive sense. It wasn’t placing the investment where I thought anybody would find the value.

What seemed more likely to work to me at that time was to just put the book on a diskette (they were still much more common then than CD-Rom drives) to allow one to just read it on their laptop. The writer and enrepreneur Po Bronson might not remember this, but he and I discussed that idea at great length at the time. Meanwhile, I predicted in 1995 and 1996 that CD-Roms were going nowhere, that the “action” for book publishers would be online, and that the first important thing that would happen online would be increased sales of plain old printed books, all of which turned out to be utterly correct.

Now, as Yogi Berra allegedly once said, we have deja vu all over again.

In the later 1990s, the simple ebook delivery I imagined happened through online distribution, not diskettes. The devices of choice were plain old PCs (mostly reading PDFs) and handheld PDAs, reading the Palm Digital format, Microsoft’s new “dot lit” format (remember how revolutionary that was supposed to be when it first came out!), and then Mobipocket which, until Amazon bought them and largely buried them, was going to be the cross-platform standard.

Now that I had what I wanted, I was a happy guy. I started reading ebooks predominantly and I went out on the prediction limb again. I figured that PDA-reading would become widespread, and quickly.

Talk about jumping into an empty pool!

In fact, underscoring my misunderstanding, I wrote in about 2004 or 2005 that PDAs were the key to ebooks. If you carry a PDA, was my thinking, then you shouldn’t need anybody to explain the advantage of ebooks to you. It was transparent; you always had your book with you. And, conversely, I figured that if you did not have a PDA, there was no great advantage to ebooks. What I saw as the big advantage was not having to carry the book as an “extra.”

Still, ebooks just didn’t happen. I couldn’t understand it. A lot of people told me the problem was that ebooks didn’t really do anything that couldn’t be done with plain old print books. They didn’t take advantage of the opportunities afforded by digital books. No video. No audio. No web links. That didn’t seem like the answer to me. I remembered the CD-Rom fiasco.

Then Kindle came along. On the one hand, it proved me wrong because here was a device that had to be carried around (like a book) and didn’t do anything for you except let you read a book. On the other hand, Kindles sold well (particularly considering Amazon was the only place to get one) and, more important, Kindles sparked an explosion of interest in and uptake of ebooks. And that, I thought, proved that “just the book” was enough for many people to have a satisfying ebook experience.

But now it looks like market forces are going to tempt publishers to invest in enhanced ebooks all over again. We are awash in news of new ebook readers — meaning both software that can play on PCs, netbooks, iPhones, or various more dedicated devices and a slew of those more dedicated devices to choose from. So people are going to be reading books on devices that can do a lot more than a Kindle or Sony Reader can do.

Two other things happening at the same time also push for more complex ebooks. One is that the tool sets to deliver them — and even to allow any author working with a bright young person alongside of them to deliver them — are getting more ubiquitous. And the other is that publishers think they see a connection between more complex ebooks and higher-priced ebooks, and that makes them very interested in exploring the subject.

A lot has changed in the past 15 years since the CD-Rom era. I am not in any way suggesting that the CD-Rom disaster of the mid-1990s will be repeated in the enhanced ebook era we are heading to now. But nobody figured out what compelling consumer product could be made from a book with lots of digital space to play with then and we’d be kidding ourselves to think anybody’s figured it out now either. There will be a lot of trial and error work done by the industry in the next couple of years trying to find the book-into-something-better formula that works artistically, functionally, and commercially. The answers are by no means self-evident.

One cautionary tale from the CD-Rom era. One of the first big successes on CD-Rom was issued by Simon & Schuster and based on StarTrek. In retrospect, we can see that StarTrek was the “perfect subject”: the one thing that would work with early-adapting techie geeks even if nothing else would. Unfortunately, S&S read the StarTrek success as an endorsement of the CD-Rom product idea and rapidly expanded their new media division to do more titles. Nothing else came close to matching StarTrek’s success.

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Although the decline of newspaper book review sections is just a sub-set of the larger sadness of the overall demise of newspapers, I was struck by the recent report of the mighty Los Angeles Times Book Review being stripped down to practically nothing.

I haven’t read it for years, but this news made me think about a time when book reviews in that paper were important to me.

Something over 40 years ago (wow!), I was an undergraduate at UCLA fortunate enough to take a bunch of courses from Robert Kirsch, who was then both the Book Review Editor of the LA Times and the daily book critic. Kirsch wrote six daily book reviews a week and edited the Sunday section. He also taught a course or two each quarter at UCLA, assigned more writing than any professor I ever had, and put more editing and commentary marks on the stuff we turned in than any other professor did too. He also clearly had plenty of time to have fun.

Obviously, there had to be a trick to it.

Kirsch explained to one of our classes that he had invented a speed-reading technique for himself in the early 1950s before he had ever encountered Evelyn Wood. The key, Bob said, was that you had to stop “silently reading aloud”, effectively articulating each word to yourself (as we all did, he said) as you processed it. He said if you put your hands to your throat you could feel yourself doing it. Avoiding that, he claimed, allowed you to pull in whole sentences and paragraphs at a time.

I just didn’t get it. It didn’t make any sense to me. I always read “word by word” and still do. But Kirsch read at a speed that I would call “scanning” (his eyes moved over the page) and he turned pages like a person who was looking for something that would stand out. (Let’s say you were looking for a series of capitalized words on a written page: “United States of America” or “American Civil Liberties Union” and think about how fast you could scan text and be sure you weren’t missing that.) But he remembered everything he’d read.

(Years after I left school, I met my wife who reads in these chunks the way Kirsch did. I always finished every reading test I ever took before time was up; Martha reads narative books about 2 or 3 times as fast as I do. She’s not as fast as Kirsch and she didn’t consciously “teach herself” the way he did, but she also does what I just can’t get: she reads in chunks, rather than word-by-word.)

Kirsch loved writing those daily book reviews and teaching the classes, but he hated the admin involved in being the book editor. So around the time I graduated from college, he took his best student from UCLA, Digby Diehl, and made him the Book Review Editor. (I am deliberately not checking this story with Digby — with whom I have a friendship that goes back to those days — prior to posting but I’m going to tell Digby about the post and invite to “revise and extend” my remarks as he sees fit as a comment.) Kirsch once, in a weak moment, said I was the best (or maybe he said “one of the best”; I didn’t have hearing aids yet back then but needed them) student he’d had, but I wasn’t old enough to be considered for the job. I wouldn’t have been as good at it as Digby was anyway.

The first course I took from Kirsch was on “Criticism” and the first assignment he gave us was to write “Your Critical Credo.” What are your rules for yourself when you write criticism of literature or movies or art? What are your standards? This was typical of Kirsch, assigning you something that forced you to think about how you think.

Another assignment that stands out in my memory was a movie review we did for his class. Bob arranged for us to see a movie screening of a Campus Christian Crusade film called “Up with People”. We saw the film in an evening screening and had to turn it our reviews at class the next day, just like real film critics!

A number of us stayed in touch with Bob Kirsch after our college years. I remember an assignment he had in London in the early 1970s and recall his pretty and youthful and blonde wife wearing a leather skirt she had bought on Carnaby Street in London (according to Bob.) We lost him far too young; he succumbed to pancreatic cancer in the late 1970s. Even the nature of his death, as it was told to me, bore his special stamp. When he got the diagnosis, he and his wife moved to a beach cottage in Santa Barbara where he lived out his few remaining weeks without treatment or any fanfare. He accepted reality. I think that was a hallmark of his intellect.

Of course, the realities of Kirsch’s time didn’t include disappearing newspapers and disappearing book review sections covering a disappearing trade book business. But I can only begin to imagine what he would have done with digital reading. Plenty, I’ll bet.

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I lost a very dear friend who was a unique figure in the publishing world two months ago when Caroline Latham died in Novato, California. I am pretty sure she was 68 or 69; her close friend Joan was sure she was 70. Even Caroline didn’t know for sure.

I met Caroline in 1978 when my family’s Two Continents Publishing Group, a distributor along the lines of PGW or NBN, and her Latham Publishing Company, a packager of college textbooks, were in their last days. Two Continents was desperately looking for more books to distribute; Caroline was desperately looking for additional ways to monetize content assets she held. We couldn’t solve each other’s problems then, but we became friends and I got to know one of the most extraordinary people on the planet.

Caroline had been raised in an oil-industry family; her father was an engineer. She had grown up in various places in the US and in Iran, and went to Oberlin College very young. She graduated from Oberlin at the age of 16 or so (later events established that she didn’t really know) and, as she put it to me, married the richest young man in town who had a job as a college traveler for Macmillan, putting Caroline in touch with the college textbook business. For several years, Caroline lived a relaxed life, bearing a son and daughter and indulging her lifelong passion for the written word. She read extraordinarily fast and could literally devour several full-length books a day. By the time she was in her early 20s, she had read more books than most well-read people consume in a lifetime.

Then, after they had moved to New York so he could move from sales to being an editor, her husband suddenly disappeared from her life. As I recalled the story, he was discovered a few years later, having had a total emotional breakdown, in Detroit. Caroline abandoned his family’s fortune to him for a variety of reasons — one being that she knew he would need it to live out his life — and immediately shifted to writing textbooks to earn a living in New York for herself and her children, Scott and Sarah Bridge. Her kids were just about grown and out of the house when I met her and she began to work in trade publishing.

The first project we worked on together was for a Warsaw Ghetto survivor named Jack Eisner, who had made a fortune in the US after World War II and then, in the late 1970s, was underwriting the telling of his story through all available means. Caroline ghost-wrote his book, “The Survivor”, and Abby Mann was hired to write the play of the same name (which closed very quickly despite Jack’s efforts to build a success on Broadway.) Caroline and I together made a deal for the book with William Morrow; then she supervised a team following scripts I wrote to augment the house’s sales efforts with calls to bookstores all over the country, an effort that seems rather quaint today but actually produced measurable results back then.

Caroline was really good at the ghost-writing thing. She could “become” any person and produce an appropriate style or voice. She never violated the trust by telling me his name, but I know that she ghost-wrote many of the books and articles signed by the head of the business school of one of the country’s better-known universities. She also ghost-wrote a sociology 101 textbook that became a standard in the field.

From ghost-writing and a brief unsuccessful stint as a literary agent, Caroline moved on to authoring. She wrote celebrity bios of movie and pop stars (many of them penned in a few short weeks): her bio of Michael Jackson hit the bestseller list. She co-authored “Life with Rose Kennedy”with Kennedy secretary Barbara Gibson, another book that hit the lists. She did a bio of David Letterman 20 years ago. Our Filedby web site has pulled together the biggest list available of her credits, but I’m quite sure it isn’t complete.

Of course, the Eisner book doesn’t show up on Filedby under Caroline’s name; it was ghost-written. Another project we worked on together that was ultimately published was a book to reveal the duplicity of Nixon and Kissinger in the Vietnam War by a Denver lawyer and peace activist name Joe Amter. There were others…

By 1990, Caroline’s kids had moved to the West Coast: Scott was pursuing a career in Seattle as an agent for exotic travel and Sarah was in the real estate business in San Francisco. Caroline moved to the Bay Area and, with Sarah, started a new business called RealFacts. RealFacts is a database surveying rents and occupancy in multi-family housing, a business Caroline grew and ran — sometimes with Sarah’s help and sometimes without — until her death.

But none of this — not raising two kids without a husband; not writing dozens of books; not even picking up, moving on, and starting a completely new business at about age 50 — describes what made Caroline so extraordinary. You see, she couldn’t. That is: she couldn’t see.

From the time I met her, I was aware that she had trouble with her vision. She wouldn’t know me if I passed her on the street (we lived not far apart in New York, so that happened.) She had to hold written material very close to her face or look at it through very thick glasses. She drove a car, but admitted to me that she probably shouldn’t (she drove slowly and, as with everything she did, with a huge application of intelligence.) Apparently she had an accident earlier in life that rendered one eye absolutely useless; the stark worsening of diabetes in her 50s, concurrent with the ailment that compromised her heart, robbed her of much of the rest of her vision and for the last years of her life she was legally blind.

But, somehow, she read; she wrote; she built and ran a business.

It was in the late 1990s that Caroline suffered an infection which lodged in her heart and induced congestive heart failure. The Mayo Clinic branch in Phoenix told her in 1998 that she had three months to live. She then took over the custodianship of her own health care, pretty much telling the doctors what to do from that time on. A few years later her kidneys also started to fail, which is when I learned (from her) that just about everything that helps the kidneys hurts the heart, and vice-versa. She was managing a very sensitive balance, which she did — for years.

Her health issues became further compounded with a digestive malfunction that, as far as I know, was never successfully diagnosed. But it meant she was deprived of one of her great pleasures — eating. What used to be a source of great joy and amusement became a chore and a challenge. But she persevered and, although she went from being a rather large and round lady to a lean and frail one, she cheerfully lived with the condition for the last several years of her life.

Caroline was a totally unique mixture of a brilliant intellectual with eclectic tastes that ran from very middle-American to quite sophisticated, the former being perhaps a product of her family’s tight connection to a little town called California, Missouri (she called it “CalMo”) right in the center of the state. She could parse professional material in business, science, medicine, statistics, and real estate. But she loved gossip about movie stars and celebrities, spending time at the beach (when I met her her “ambition” was to own and run a small hotel on a Caribbean island), sports, and pop culture. (A CD of her favorite music that she gave out at her 65th birthday party was testimony to that: it starts and ends with Ray Charles and in between you find artists as diverse as Frank Zappa, Leonard Bernstein, and the Beatles, and June Carter Cash!) She was not a beautiful woman, but she usually had an affectionate and caring boyfriend, often a Caribbean man with a limited education. She related to everybody.

And she cared about everybody. She not only wrote more books than any two people I ever knew, she also lent a personal helping hand to more people than anybody I ever met. Over the years, RealFacts had employees who were down on their luck or otherwise found themselves in dire need. Whether through fault of their own or not, Caroline was always there to help them. Sometimes they let her down and she had to let them go, but if they got on new meds or turned a corner some other way, she’d take them back.

I found out that Caroline didn’t now how old she was when she had her 65th birthday party in Novato in 2005. She celebrated the party because she found out that Social Security thought she was 65, even though she thought she was 64! I remember getting that party invitation in about January and her birthday was in June. We wondered whether she’d make it; she was already frail, it was years past the 6-month death sentence from the Mayo Clinic, and she was on the heart-and-kidney teeter-totter that was the story of the last decade of her life.

But she did make it; she made it to that party and for several years beyond, including a wonderful 1-week trip back to Manhattan, along on which she brought an entourage and took an apartment on West 55th Street. She continued to consume books (by audio now, with the help of a friend named Don Christensen in New York who remotely picked out the books to be delivered to her for her from the local Marin County Library System.) She put a program on her computer that blew type up to a huge multiple of its normal size — so big that you had to move the type across the screen with the mouse to read more than a word or two at at time, and she continued to read and write. (I know because she answered my emails!)

Being Caroline’s friend for the past several years has meant knowing a phone call delivering news you don’t want could come at any time. I got the call last May from Caroline’s friend Joan Winer Brown, who told me Caroline was about to die. She had been taken to the hospital with blocked intestines, unable to take in any more food. Doctors were telling her there was no point to surgery; Joan felt they were about to stop heroic efforts.

But a month later the news had changed. Caroline had, from the depths of her illness, mustered the strength to tell the doctors and her caregivers, “yes you will operate. Do whatever you can that might save my life.” And they did. Caroline moved to a rehab facility by the end of June.

I last spoke to her on the phone when she was in that rehab facility and about to go home. Talking on the phone was something Caroline always loved to do. Her voice was weak, but her mind was clear. She knew the odds against her were long, but she was determined to manage things toward a solution as long as one was possible. She was happy to be going home.

I’m glad she got that last couple of months in her own house and the feeling, to the end, that she was in some ways at least the master of her own fate. She leaves a daughter and granddaughter and son and brother and countless friends who will never forget her and her kindnesses, and will certainly never meet another like her.

I am indebted to Caroline’s close friend Joan Winer Brown for some key information that is in this post.

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There is considerable concern among the trade publishing establishment about the future of brick-and-mortar stores. As well there should be. Retail stores provide the most efficient promotion opportunities for books: putting them in front of people poised to buy. They give clear signals about sales appeal by positioning and piles of stock of varying sizes; they make it possible to “look inside” of illustrated books in ways that no online presentation can match; they enable discovery through serendipity; and they put more different book choices in front of any person faster and more efficiently than any web page or smart phone screen possibly can.

But they’re troubled. Same store sales, or what the Brits call “like-for-like”, have been declining. That may be partly due to the recession, but it is also due to factors that won’t go away: shifts of sales to the Internet, to ebooks, and perhaps to substitutes in other media and the Web.

The magic that grew Barnes & Noble and Borders into behemoths was large store size and title selection. My first experience with this effect was a lesson from my father, Leonard Shatzkin. He took over executive responsibility for the Brentano’s bookstore chain as a vice-president of Crowell-Collier (later called Macmillan, a company subsequently bought by Simon & Schuster and not connected to the company now called Macmillan) in the early 1960s. The store in that chain that was doing least well was in Short Hills, New Jersey. They doubled the number of titles the store carried and it soon was the best-performing store in the chain.

But the “size as a magnet” concept took a back seat to mall store expansion by Walden and B. Dalton in the 1970s. As shopping centers were built across the country, the mall developers favored national chains, which were “bankable”, for their leases. Walden and Dalton rode that wave and added hundreds of stores. Meanwhile, partly assisted by the expanding wholesaling services offered by Ingram, independent stores thrived and grew their title selections beyond what the space-challenged mall stores could offer.

In the late 1980s, Bookstop, a discount chain in Texas, pioneered the “superstore” concept: a massive selection of 100,000 or more titles under one roof. This was the Brentano’s Short Hills effect writ large. By that time, Borders and Barnes & Noble, which already had larger stores than the mall stores, had bought Walden and B. Dalton, respectively, giving them critical mass to support robust central operations and provide leverage in their relationships with publishers. The new superstore concept suited Wall Street, and the two big chains were bankrolled to roll out superstores nationwide.

This was great for everybody except some of the larger independents which, up to that time, had the large title selection field to themselves. For publishers, it meant lots of additional shelf space for their backlist. For consumers, it meant a large increase in choice at hundreds of locations around the country. The attraction of 100,000 or more titles under one roof was compelling; these superstores didn’t need malls to bring them traffic. They were destinations worth traveling to on their own.

But then came the Internet, and Amazon. As we used to remind ourselves quite often ten years ago, “the Internet changes everything.”

And what the Internet did was to seriously dilute the attraction of so many titles under one roof. Now “unlimited” choice was available online: not a hundred thousand titles, but millions. Not just the books presented by active publishers and chosen by buyers, but all the books, in or out of print.

By the turn of the 21st century, it seemed to me that the powerful attraction inherent in the massive superstore selection was muted. I advised a client to “leverage your infrastructure to figure out how to make the small store work.”

But, by that time, both the big chains were phasing out their mall stores. This was not entirely a matter of store size, although it might have been seen that way. The malls the stores were in were often in suburbs from which prosperity had moved on. The effect of the Internet wasn’t just being felt by bookstores, but also by department stores, which were the “anchors” that brought traffic to the malls. So footfall at the mall stores fell, quite aside from any negative impact of a limited title selection.

In 2009, the mall store era has officially come to an end. First Barnes & Noble announced it was closing all the remaining B. Dalton stores. Then, this week, Borders announced it is shuttering more than half of the remaining Walden stores, which will leave only 130 operating, in January.

Meanwhile, it only takes a visit to a B&N or Borders store today to see that they are hardly stuffed with books; the ones I’ve been in lately appear to have more space than they need, and this is when stores are relatively full of merchandise.

Of course, larger stores can be more cost-effective than smaller ones for other reasons beyond the attraction of the title selection, even if that attraction is working well. There are per-store costs, of store management and central management attention, that don’t readily reduce with store size. And while the effect of a massive title selection at a retail location might not be what it was 20 or 40 years ago, more titles will certainly attract more traffic than fewer.

Meanwhile, the other big change in the book retailing scene in the past 20 years has been the growth in sales at mass merchants: Wal-mart, Costco, and the price clubs and supermarkets. These stores leverage existing traffic (one would think that few, if any, customers go there for the books) and deep discounting to make significant book sales with a very limited selection of titles, usually well under 5,000. They’ve been part of the problem for full line book retailers. Their pricing and ubiquity bleed off sales of the highest-profile bestsellers. In the 1970s, bestsellers pulled people into bookstores where they might buy lower-profile books. Today bestsellers are presented to the public at cut prices where people buy their groceries or school supplies, leaving the bookstores with the customers who still consider them a “destination.”

Both of the big bookstore chains, but particularly Barnes & Noble, own unmatched infrastructures to deliver a curated selection of books to dispersed retail locations. They found it impossible to make the small stores they owned in the mall locations profitable, even with those capabilities. (In fact, Borders, which doesn’t have a supply chain to match B&N’s, outsourced some of its shelf-stocking at Walden to wholesalers in recent years. It is inconceivable that B&N would ever do something like that.)

But bookstores are going to be getting smaller; we know that intuitively and the stock we see in the current superstores confirms it. And smaller bookstores, if they were planned to be smaller, would require less space, less traffic, and less sales to be viable.

Of course, smaller stores wouldn’t be a magnet for traffic; that’s what turned the Short Hills Brentano’s around and that’s what fed the whole superstore revolution.

So it would seem the combination for the future might be a B&N or Borders mini-store inside another large retailer. Remember, many other retailers are going to be having the same problem; figuring out to deal with having too much space, so there should be potential collaborators on the other side of the partnership. This will require a different kind of inventory management than the chains exercise now; more of a rack-jobbing approach. But their capabilities: to source books, select books, organize books for presentation, and to deliver books all over the United States, will have more consumer demand than they’ll be able to satisfy with only their own very large stores.

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One of the findings of our StartWithXML project was that book publishers can expect the market for pieces of their content and databases of their content to grow, even while the market for books themselves may not. In the context of our XML research, that is part of the reason publishers need to tag their content deeply (so they can find things) and make their content agile (so it can adjust itself to the different display requirements of different end users.)

After all, we’re in an era where web site content is needed by every entity on earth. Most of it will be unique and will need to be uniquely created. But an enormous volume of content for web sites has, and can, come from existing intellectual property.

The challenge is to create an efficient marketplace to enable that content to be found, licensed, and paid for. It can’t be the function of each individual publisher to peddle and transact for its own wares in this environment. It wouldn’t be cost-effective for the buyer or the seller.

And this brings us to Copyright Clearance Center, CCC, a not-for-profit corporation that licenses published content of all kinds for re-use by what must be the largest and most diverse collection of content purchasers served by any aggregator on the planet. We’ve gotten to know CCC this year as a client. We’ve never encountered an organization in our industry dealing with more complex challenges and it looks like CCC will be in a position to play a critical role helping publishers cash in on the new opportunities in digital licensing.

CCC was formed in 1977 by a group of content users, authors, and publishers and opened its doors on January 1, 1978, initially to enable publishers of all kinds to collect the payments legitimately due to them for internal-use copying of material, primarily by corporations and academic institutions. The number of entities licensing content from CCC is vast: over 35,000 businesses and more than 1,000 colleges and universities. Prior to CCC, the market was inefficient, costly, and fragmented and the cost of negotiating the use-by-use licenses made widespread unlicensed use inevitable.

Initially, CCC collected this copying money on a per-use basis, which was more efficient than the many-to-many negotiations that took place previously, but must still have been incredibly cumbersome. Beginning in 1984, CCC went to its “repertory” model, by which annual license fees allow unlimited copying of all the material covered by the license.

Because CCC effectively represents all the print content — newspapers, magazines, journals, and books, and, increasingly, photographs and blog material, it makes utter sense for users to pay them a fee to legitimize (almost) all their internal xeroxing at a stroke. CCC employs sampling-and-projection methods similar to what the music licensing agencies ASCAP and BMI use to grant radio station license fees to song owners and distribute money to rightholders.

Over the past decade, CCC has seen its revenues shift from being nearly 100% print copying to what is now 60% digital rights. They are exploring adding additional services, such as specifically licensing re-use in emails or email attachments.

CCC is a remarkable community resource that publishers need to understand better because there is no practical alternative to them for much of what they do. If two conditions apply, then CCC is essential to a publisher maximizing its revenue:

1. if the licensor needs material from that publisher, but from other publishers as well;

2. if the transaction value is low and won’t support much conversation or negotiation on either side.

The StartWithXML research definitely suggests that revenues that come with those two caveats attached will be a fast-growing part of publishers’ businesses for the foreseeable future. That means greater value for publishers in their CCC relationship in the years to come.

Our work with CCC began last December, just about the time discussion about the Google settlement and the proposed Book Rights Registry started to heat up. The question has arisen from several quarters as to whether the BRR offers competition to CCC. My own hunch is that if it ever does, that day is many years off. The BRR has a huge job in front of it validating and securing its database of books. CCC would have very few licensees if all it had were books; book publishers benefit from the presence of magazines, newspapers, and journals in the mix. The BRR is a long way from even thinking about setting up all those relationships.

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Daniel Menaker was not long ago the Executive Editor-in-Chief at Random House and writes knowledgeably about the state of play and state of mind inside Big Publishing today. His piece Redactor Agonistes is a psychological snapshot of a declining industry, a catalog of the frustrations that are increasingly common in an environment where, as hard as everybody tries, the numbers just keep getting harder and harder to hit.

The first point to make about Menaker’s article is that is published by review, barnesandnoble.com’s online magazine. I knew that B&N was working hard on online content, but (not being much of a book review reader) I hadn’t actually looked at it until this article. Of course, it shows the magic of the web; I was directed to the Menaker piece by a number of online referrals and now I’ve discovered a whole new source of interesting content. This kind of intellectual article is not what I previously would have expected to see in a free publication created by a retailer! And it shows that BN.com is thinking about the value of a community of readers who think about the book business.

Menaker makes the overall point — familiar to anyone in the business — that publishing is about saying “no” far more often than it is about saying “yes.” Most submissions don’t get an offer. Most of the books that are published don’t get much attention. Most of the books that are published don’t earn out their advance (although that is not saying the same thing as “most books don’t make money”, which Menaker comes dangerously close to conflating. And if you use the benchmark of “make money”, you get drawn into a conversation about how charges for overheads are handled, which is a conversation we love having but we’ll save it for another day.)

I have said for years that “publishing a book presents the temptation to make an infinite number of decisions, which must be resisted.” Menaker notes this aspect too when he points that out that editors have to deal with nitpicking about the jacket, the design, the flap copy, all of which can be labored over forever if every thoughtful comment is responded to.

Menaker also notes the disconnect between the editors, who acquire the product, and the sales team that has to turn the investment back into revenue. Despite some years in the business at a reasonably senior level, Menaker admits “you don’t know what sales reps say about [the] book when they make sales calls.” He admits to a suspicion “that salespeople’s and buyer’s biases and preferences play a greater part in a book’s fortunes than most editorial people want to allow themselves to understand”. While I can quantify his benchmark about the editorial people, I can tell him from years of experience with sales that rep and buyer prejudices — which they would call either “tastes” or “instincts” — are, indeed, a significant component of the success of all books below the very top echelon.

Menaker notes that success in frontlist publishing is “very often random.” This is a level of humility and honesty that probably would be very hard for top management to accept from anything but a former executive editor-in-chief.

Of course, all these things — and many other things Menaker says in this piece — not only are true of trade publishing, they have always been true! In fact, with the consolidation of accounts, it is probably easier today for an editor to talk to buyers constituting a significant portion of a book’s potential than it was 20 or 40 years ago. (The sales department would hate the idea, but three or four conversations could cover more than 50% of the potential for most books.) The randomness he notes in frontlist success was probably greater when the account base was more decentralized. Publishers have always turned a lot of books down. Publishers have always done very little for most of the books on their list (besides putting them in a catalog, printing them rightside up, and sending them on their way.)

But I think Menaker is right when he suggests that publishing houses aren’t as happy places to be as they used to be. I just don’t think he has put his finger on the reason why.

He comes closest at the end when he talks about the creative acquirers’ need to feel that they have the “knack” of recognizing raw intellectual property that ends up making a lot of money. That’s really the problem; it is getting so hard to make money.

But that’s not because of the time-honored problems; it is because of the changes in the environment around publishing.

Each new book today is competing with millions of other book choices quite accessible to the consumer; 20 years ago it competed with about 100,000 other books. Forty years ago it competed with fewer than 50,000. Used books are offered right alongside the new ones online — a development of the past 10 years — and will increasingly be in the stores over the next 10 years. The amount of shelf space available for books at retail is shrinking for the first time in our lifetimes, while the number of titles competing for space is mushrooming. Menaker says 150,000 titles are being published annually; counting by the new ISBNs each year, the number is actually two or three times that large. Industry output was about 10,000 titles annually in the 1960s.

And all of that is before we take into account the information you would have gone to a book for 20 years ago that you go to the Internet for today: to choose a hotel in Paris, to figure out how to tend to a sick geranium, to find a great recipe to turn leftover ham hocks into soup.

It’s not just in people’s imagination that the business is getting harder and it is also becoming more depressed. People in books are not as happy as they used to be, because success, as measured by dollars in over dollars out, is not as ubiquitous as it used to be. The change Menaker takes note of is not attributable to the changes in the way we do business; the changes in the way we do business are a response to a changing environment all around us. It is characteristic of an industry that is getting smaller after several hundred years of only getting bigger.

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Back in 1993 or so, my friend Lorraine Shanley of Market Partners International and I went to a free half-day conference sponsored by Microsoft. At the time, Microsoft was really pushing the computer manufacturers to install CD-Rom drivers into new computers. They had a definite selfish interest, which was to reduce the cost of goods for their software, which was being delivered on multiple floppy disks. One CD-Rom could hold what a dozen or more floppies would hold and would cost Microsoft considerably less. Since the consumer was paying for what ended up in their computer, not the manufacturing cost of the shrink-wrapped product that got it there, Microsoft knew that making the delivery mechanism cheaper wouldn’t oblige them to cut the cost of their software; they’d just make more money.

So on this particular day, they were hosting the publishing community to tell them what CD-Roms could mean to them. This was the first time that I was aware (although perhaps it had happened before) that the mainstream tech community was talking to the consumer trade publishing community and saying “have we got something for you!”

What Microsoft tried to demonstrate was that many things could be done with all the data that could be packed on a CD-Rom. They were in the process of creating their own CD-Rom encyclopedia, Encarta, and they wanted all publishers to get on the CD-Rom bandwagon. The message essentially was: “you’re the creative people; you’re the content guys. Look at all this cool stuff that CD-Roms can do. Now we don’t know what the product should be exactly and we don’t have a business model for you, but, don’t be Luddites, get off your duffs and start making some CD-Roms!”

Lorraine and I walked out of that meeting thinking, “this isn’t very helpful” to the content publishers who were our client base. So our two companies joined forces with another consulting company owned by Dan McNamee, got PW as a sponsor, and staged a full-day conference called “Electronic Publishing and Rights” (which turned out to be the first of two.) We had a plenary session in the morning, and then the afternoon proceeded on three tracks: consumer, education, and professional. (When we did the second show, we made it five tracks: consumer, school, college, sci-tech, and legal/accounting.) Both shows were sellouts and what I learned putting them together really pushed me, before the Web, before Amazon, and before ebooks had anything more than a 4-line display on an early Sony device, into the business of thinking about what the impact of digital delivery of content would be on consumer trade publishing.

Before long, the conferences we did led to the “Publishing in the 21st Century” program I described last week and the regular reminders that book publishing is many  businesses with quite different characteristics, not just one (which we had acknowledged at our EP&R shows with our afternoon tracks.)

And that leads us to Digital Book World, the new conference on digital change for consumer trade publishers that was announced yesterday. We’re now having conversations that go beyond our very illustrious Advisory Board about speakers and topics. What comes back to us over and over again is how important the trade book focus is.

For example, earlier this week we spent the day working with a client — a large aggregator — that wanted a little “ebook seminar” for their team to be part of our visit. In order to really focus the conversation, I asked for a list of questions and concerns. It became evident very quickly that this company needed information about sci-tech, college, and school ebooks and, of course, what I know best is trade. But I knew enough about the others to know that they are quite different, so I checked in with two smart industry colleagues (both of whom are members of our Advisory Board, as it happens) who know both the trade and non-trade spaces. We came up with a list of distinctions, but one really stood out to me.

In the trade space, one of the big ebook topics (which we plan to explore in depth at DBW) is “pricing.” What should ebooks cost the consumer? The convention among trade publishers has been to peg ebook retail prices to the least-expensive edition available in print. So if there is a cloth edition and a paperback edition, the publisher would be guided on ebook pricing by the paperback (usually setting at or slightly below the print book price.)

But in academic publishing, hardcover and paperback editions are often published simultaneously. The publisher figures that the paperbacks are for the students; the hardcovers are for the libraries. Since ebooks in the academic space are considered primarily library items, and because they have often become part of larger searchable databases, the academic publishers would set their ebook prices based on the hardcover, the more expensive print book available. He also said that sometimes they are even more expensive than the hardcover, because of the additional functionality they have, like links and embedded video.

This was important information for our client, who works across publishing segments. But if presented without a clear contextual frame, it could well be confusing information to a consumer trade publisher (or an academic publisher) trying to figure out a pricing strategy. Because we are tightly focused on consumer trade publishing, our panel(s) at DBW might not mention a tie-to-hardcover pricing, but if we did, we’d pose the model and talk about why it made sense in some other context, but not in ours. We’ll be talking about lots of other things that affect price: discounts, retailer strategies and control, the impact of the publisher selling direct to the consumer, and the extent to which there is enrichment or enhancement, for example. All of those things, as well, are somewhat different in the consumer space than in the others, where aggregation and value-added capabilities are critical components of ebook development.

Now that DBW has been announced, we’re engaged in conversations to refine the topics list and speaker suggestions we’ve gotten from our Advisory Board. We’ll be announcing speakers and panels as they are nailed down. We’re striving for a show that will scream “this is for me!” to consumer trade publishers. While we’re not doing a “call” for topics and panels (we did that ourselves, internally and with our Advisory Board, already), we certainly will happily entertain suggestions. If you have any you want us to consider, better to email my colleague Sophie Shepherd (at sshepherd@idealog.com) than to post them here (though you can also do both.)

This post and my last post last week and many you will see in the weeks to come will be making the distinction between “general trade publishing” and other book publishing. That distinction is a remarkably important one, but it is also going to be a disappearing one. In fact, the distinction between “book publishing” and “publishing” is going to be a disappearing one over the next couple of decades; we have talked before about the fact that format-agnosticism will increasingly characterize all media, not just publishing, as will verticality. While that means that there is a real need for Digital Book World, which emphasizes that distinction, it also means there is a place and need for the more tech-centric and publishing-type-agnostic program presented at O’Reilly’s Tools of Change. Personally, I’m planning to attend both.

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