Ebook complexity: good news for publishers
We are working on a project in this office to “grid” the ebook world. We’ll have a hard time doing it in fewer than four dimensions. What we see as “major headings” are: 1) hardware/readingdevices, 2) software/platforms, 3) file formats, and 4) ebook retailers. And after we get that sorted out, we’ll start thinking about the various commercial terms. I surprised a reporter this morning (who is probably less well-informed than most readers of this blog) when I told her that Apple gets paid for what goes on an iPhone out of the App Store, but not on what goes on an iPhone from the Kindle store. (And that’s just an example…)
This morning came the news that Canadian retailer Indigo is going to partner up with a reading device, the way Amazon has its Kindle and the way Barnes & Noble is rumored to be setting up for later this year. Although there are ways to get an ebook not purchased from Amazon onto a Kindle, and there will presumably be ways to get content not purchased from the retailer partner onto the Indigo and B&N devices (when they come), it isn’t easy. Most people I know who own a Kindle aren’t aware that they can get another ebook format onto it.
Complicating things further is an entirely different sort of offer coming up from Google. Everybody else, whatever the differences (and there are many!), is selling you a downloadable ebook file which you “own”. Google is selling you access to a file which they will stream to you. What’s the difference? Two big ones.
* When you close your web browser, you no longer have the book.
* Because of that, any concern about piracy goes away. If you can’t grab the file, you can’t “share” it.
This is game-changing in a very dramatic way. If you’re reading on a web browser, then there are no format issues. And if you don’t have the whole file, there are no piracy issues.
Google has also announced its intention to enable retailers to “sell” these books (or, perhaps we should say, sell access to these books) based on retail prices they would allow the publishers to set. Google reserves the right to alter the price (or remove the title completely) if the price is out of line for the category. Later reporting suggested that Google is ready to give up a big chunk of its notional 37% (that’s their share in the settlement; it wouldn’t have to apply here but apparently they’re using it as a baseline) to retailers to make it attractive to them to resell, but they want the publishers to put skin in that game too. One of the two big questions that arise today is: what margin will they offer retailers? (I’m on record favoring a reduction of the margin from what retailers get in the physical world.) The whole question of pricing is so complicated that I’m going to leave it here and take it up in some future post.
The second big question is “how much is in that cache?” which could be phrased as “how long a tunnel can I ride the train through and still continue reading my book?” Apparently there is new technology which could largely mitigate that problem
There is no question that reading an ebook this way will not be quite as convenient as an ebook that you have in your device. For one thing, with an iPhone you’ll face real battery life issues (being connected drains power faster.) But Google is an organization that looks to the future, and the future is cloud computing, not hard drives (or even flash drives!)
But while we focus serially on each new thing: Shortcovers and Cool-er Reader and Google ebooks, there is a larger reality being sketched, and it is very good news for publishers. The more complicated this world becomes, the more an author will need a professional organization, operating at scale, to deal with it for them. And the more it weakens Amazon. It might have seemed a year ago that we were headed for a world where Amazon would rule. They kept growing their printed book share and, with the Kindle, started gathering a significant percentage of the ebook market. With a combination of Kindle and their own BookSurge POD operation feeding their vast audience of book buyers, they were moving — inexorably it might have seemed — toward being a single point of distribution that could adequately serve the market for many books. And anybody who wanted to reach that market could just hand off the Word file when they were finished writing and not have to deal with anybody else.
The more there is a market that is not served by Amazon, the more any author needs a publisher, and the more any small publisher needs a distributor. The key role for publishers in the value chain is to manage complexity and detail. That is an end-to-end challenge: including editing and shaping, designing and “typesetting”, putting into distributable form (printed or electronic), elevating consumer awareness, and making it possible for retailers to sell (or, viewed another way, for consumers to buy.) As tools have made it easier to handle origination, getting from a manuscript to reproducible (check out Lulu for printed books or Smashwords for ebooks), the publisher’s role was challenged for some books. The reorganization of the consumption world from horizontal to vertical has also challenged trade publishers: their connections to the Times Book Review and Oprah aren’t as valuable as they used to be.
But they could be saved by an ebook world so complicated that only the savviest players will be able to cover every corner of it. Coming up is the next big multiplier of complexity: when web sites start selling ebook downloads (or access) to the books that suit the vertical interests of their site visitors. The method for exploiting those opportunities in the printed book world was an affililate relationship with Amazon or BN.com because you needed somebody to manage delivery of a physical volume and they did it. In the ebook world, they’re just another unnecessary middle player. The stores will go straight to the ebook aggregators — Ingram or Content Reserve — or work directly with publishers if they have enough product to engage the vertical audience.
But even if the vertical players go to aggregators, and even if the aggregators largely manage all the complexity the supply chain is throwing at us, the ebook world is rapidly getting much too complicated for single players. If publishers (and the consultants they depend on) are getting a headache trying to keep all the new stuff straight, imagine how bewildering it is to the wannabe self-published author!