The Shatzkin Files


Show me the data!


One thing we try to do at Digital Book World is to present our audiences with useful, relevant, and, when we can, original data. It is a familiar complaint in our industry that we drive blind. Part of that is due to the sheer diversity and granularity of the “book business”. And another part is due to the blistering rate of change. The net result is that we are constantly trying to read tea leaves. We do our best to deliver some useful tea leaves to our DBW audience.

I make no pretension here to telling you all you’ll hear at DBW (which would be bad business even if I were able to do it!) But here is a roster of the data presentations and a small taste of what the DBW audience is going to get from each one.

We’ll start off with James McQuivey of Forrester Research doing a reprise of a high-level survey of publishing executives that they inaugurated at DBW 2011. Forrester got good participation in the survey, including getting fully filled-out responses from at least two of the Big Six executives.

One very interesting fact from the Forrester research is that the consensus for when the trade business will become 50% digital has moved up from 2015 to 2014. When Forrester announced the original number at DBW 2011, it seemed to many to be aggressive. A year later, it is not likely that the new prediction that it will come sooner is going to surprise a lot of people. We are apparently now used to the accelerating pace of change, but perhaps just in time to have to readjust to it slowing down. (More on that to follow.)

The team of the Milan office of A.T.Kearney (the big global consulting firm) and the Italian ebook retailer Bookrepublic have been tracking the spread of digital reading worldwide. They presented research at last year’s IfBookThen conference in Milan and followed it up with additional research presented at the Publishers Launch conference in Frankfurt. They’ve extended their investigation further — about devices, about internet purchasing, about ebook uptake, market-by-market around the world — for this year’s Digital Book World. They have added questions about self-publishing and piracy to the research they did previously and responses to them will be reported at Digital Book World.

One insight they’ve had is extremely provocative. They say, “We should stop thinking of self-publishing simply as a nice way for indie authors to be published. Viewed another way, measuring self-publishing activity calculates the amount of money Amazon (and others) are no longer sharing with publishers. And it’s growing.”

The data that will justify that insight will be part of the presentation we’ll see at Digital Book World.

We decided to take an intensive look at the romance genre because it is often considered to be the consumer segment that has moved most rapidly into the digital future. We were fortunate to enlist the help of the ebook retailer AllRomanceEbooks.com in our investigation. They circulated a survey that got responses from almost six thousand of their customers. The results of that survey will be announced at DBW and will be followed by a panel discussion with special attention to what other genres and segments of trade publishing can learn from what has happened in the romance market.

What caught my eye from the preliminary results was that only 4% of the ebooks All Romance sells have DRM. Since they carry the ebooks of all the major publishers, and all of those have DRM, what this statistic tells us is what a vast business exists in romance publishing outside the realm of the biggest players in the industry. I’ll leave the analysis to the experts we’ll have on stage for this discussion, but I personally wouldn’t leap to the conclusion that DRM-free is the only reason that 96% of the sales were of that category. Those books are undoubtedly cheaper as well. They may score higher on All Romance’s unique “flame” scoring system (which is all about how frequent and explicit the sex scenes are). But I would imagine that any big publisher hearing that statistic would, at the very least, have its curiosity piqued.

It turns out that a big component of All Romance’s sales success is that they took it upon themselves to add sub-categories describing romance — such as that flame index referred to above — that didn’t exist in the industry’s BISAC standard. That’s metadata!

Metadata isn’t ever going to be a “sexy” subject but it is certainly becoming an increasingly popular one. Our early polling of Digital Book World registrants indicates that our breakout session on metadata might be the most heavily-attended of the 30 breakouts on the schedule. (And everybody who goes will be glad they did. We just reviewed the content of the session with presenters Bill Newlin and Fran Toolan; it’s going to be great!)

Having been told for months and years that good metadata enables sales and bad metadata prevents them, I wanted to get some factual confirmation of that. So I asked Jonathan Nowell, the UK-based head of BookScan and the bibliographic source BookData, if he could do some research to connect the two (his being the only organization that has the information to tie metadata to sales data.) Jonathan did a presentation on this subject for Publishers Launch Frankfurt; he’s updating it for Digital Book World.

The most arresting takeaway last October at the Frankfurt presentation was that adding “enhanced metadata” elements to a basket of backlist books not only stopped their normal sales decay, it reversed it and actually made sales of those books rise after the metadata was improved. Everybody will really be able to visualize the importance of metadata after they hear Jonathan’s presentation.

Verso Media is an advertising agency with high digital consciousness and a deep interest in book purchasing and consumption habits. They survey book consumers looking for insights about the digital changeover. The single most startling takeaway for me from the preliminary results I saw from this year’s research is that the number of people who actually resist the idea of reading digitally has gone up from 49% to 51% of respondents. This data point is in line with other tea leaves that suggest that we might have started to hit real resistance to ebooks, slowing down the digital switchover from the rates of the past few years. And that certainly would not have been what I would have predicted. Jack McKeown, who has held senior positions at three major publishing houses, oversees the Verso research and will present it.

At our Publishers Launch “Children’s Books Go Digital” show on Monday, Conference Chair Lorraine Shanley recruited two trend analysts who are offering interesting trend and data observations of their own.

Amy Henry, VP of Youth Beat, observes that parents and kids are sharing personal experiences more than we remember from our youth. More than 2/3 of teenagers listen to music with their parents! The takeaway is that parents can be marketing conduits to their kids; they’re not just gatekeepers you need to sneak your way past, which is how they have often been characterized in the past.

Ira Mayer, Publisher of Youth Market Alerts, delivers data that tells us that two-thirds of the apps Moms get for their kids are either free or under a buck. Fewer than 10% are more than $3. These are sobering facts, but anybody entering the app space to make money better know them!

Kelly Gallagher, Vice-President in charge of research at Bowker, will have important data to share at both shows. His team has been surveying a pool of book purchasers on behalf of BISG for a couple of years and has charted the growth of the ebook market for the industry throughout that time. The data he’ll be reporting from the latest fielding is so fresh that it misses the deadline for this post. But it would seem likely that the data will show that the ebook switchover is finally slowing down after about five years of doubling or more than doubling annually. That would be of meaningful interest to everybody in trade publishing and would tend to confirm Verso’s finding that the point of more determined ebook resistance grows nearer.

Bowker also runs a study of the children’s book market and he will share appropriate data from that research at the Pub Launch show on Monday. Kelly showed me a couple of slides that suggest that young children’s print could be around for a while. Parents like the idea that a book isolates kids from what are otherwise constant digital stimuli. And what attracts kids to digital is portability (having access to more titles) which, broadly speaking, is more important as kids get older. And he’ll reprise that data presentation at Digital Book World on Tuesday, followed by a panel discussion among participating publishers in the study, including Disney, Scholastic, and HarperCollins. That discussion will be moderated by Kristen McLean, founder of Bookigee and former executive director of the Association of Booksellers for Children.

I don’t mean to suggest that data is all we do at our conferences, or even most of what we do. It isn’t. But we see it as part of our job to encourage the development of original information, such as we did in conjunction with All Romance and Nielsen, as well as to deliver information from efforts already underway within the industry, like the reports we’ll get from Bowker.

Digital Book World will also feature main-stage presentations from Amazon, Barnes & Noble, and Kobo which we expect will also be data-rich (as well as one on business model experimentation from Oren Teicher of the American Booksellers Association), helping us all understand what happened this past Christmas. Keeping up with this pace of change is hard enough; doing it without data is impossible.

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  • Bob Mayer

    What I wonder is how well the Big 6 will be represented at DBW?  I noticed at Storyworld in San Francisco last year that Random House sent an editor, but she didn’t attend the digital book add on.  And there wasn’t a single person from any of those houses listening to what’s going on in digital books.  Makes you wonder.

    • /blog Mike Shatzkin

      Bob, the Big Six will be very well represented at DBW. I haven’t looked at our overall list to see how many registrants we have from them, but there are presenters from all the Big Six houses on the program and they have all been both thoroughly engaged and cooperative as we’ve put together the show.
      Mike

      • Jack W Perry

        On the panel I am moderating, we have someone from Random House, Hachette and Penguin. Plus a representative from the Atavist – a very smart start-up in the digital space.

      • /blog Mike Shatzkin

        Thanks for adding that detail, Jack.

        Mike

  • Chris

    The Verso data is interesting. I’ve actually found myself preferring print books lately simply because I spend 10-12 hours a day on a computer. Relaxing with a Kindle after that is not very relaxing at all. A print book, however, feels single purpose and allows me to switch off. 

    Of course, the brick that is Steve Jobs’s biography kinda got exhausting to lug everywhere! So, maybe the ebook would have been a better purchase. Cheaper too considering it cost 40 bucks here in Oz.

  • Chris

    The Verso data is interesting. I’ve actually found myself preferring print books lately simply because I spend 10-12 hours a day on a computer. Relaxing with a Kindle after that is not very relaxing at all. A print book, however, feels single purpose and allows me to switch off. 

    Of course, the brick that is Steve Jobs’s biography kinda got exhausting to lug everywhere! So, maybe the ebook would have been a better purchase. Cheaper too considering it cost 40 bucks here in Oz.

  • Anonymous

    AllRomanceEbooks’ figures are  more about diversity than metadata.

    Romance is incredibly diverse these days.  Not only do you have the traditional types of romance, but also you have romance versions of all other genres and their subgenres.  Science fiction space opera becomes SF romance, urban fantasy becomes paranormal romance, etc.  The major ebook sites’ fondness for dumping romance into a vast pile or piles certainly doesn’t help sales.  Tags help to a certain extent, though.

    • /blog Mike Shatzkin

      Without a specialization in romance, which All Romance has, the big retailers don’t have the sophistication in the genre to invent a tagging scheme. The big question (to me) is whether this kind of advantage extends to other specialities in the same way. I hope we’ll explore some of that at DBW.

      Mike

  • Luis Peazê www.luispeaze.com

    Between 2009 and 2011 you Sir Shatzkin and all of your
    followers of this “Mists of Avalon between midtown NYC and London” tried to make the
    rest of us to believe digital book would dismantle the whole traditional
    publishing industry, now you are saying the eBook randevú is slowing
    down, and even funnier, don´t have “data” to assure any serious
    assessment. Ah, ah, ah, ah! In the mean time, in Gotham City, BatMan, BatMan, BatMan, thandandan, thandandan, thandandan, BatMan, BatMan, BatMan… http://www.luispeaze.com

    • /blog Mike Shatzkin

      Luis, there *has been *significant disruption of the book business since we started planning the first DBW in 2009. Aside from the fact that I detect an attempt at ridicule in your remarks, I am not sure what they are meant to convey. Since this conversation started at DBW, a major US retail chain has gone down, the other one has totally reallocated its store space away from print books, and everybody I know in the industry is dealing with major change. If you’re in some bubble where that’s not yet apparent, I suspect it will be soon. I even suspect it might be apparent to somebody on your immediate left or immediate right. Perhaps disruption is just in the eye of the beholder.

      Mike.

      • Luis Peazê www.luispeaze.com

        Hi Mike, no, I am not attempting to ridiculirize at all, I actually like
        your points of view that´s why I keep my eye here, but again if you
        felt that way in first place other than anything else productive I will
        look into what can be ridicule in it… I can then learn something.
        Taking the acid out it, look from a positive angle, “we all’ need to
        acknowledge that while dealing with two diferent things “books and
        business”, we gave in ourselves too easy to the second one but not
        specificaly to the book-business itself, to the hardware-tech-business
        instead, those guys have noting to do with book at all, only with what
        can sell to “click-person-types” and it takes a lot of  coffee, or wine,
        to discuss. Bottom line, disruption happens at every fractal of life,
        otherwise we wouldn´t loose our hairs, don´t we? Let´s just keep in the
        middle when make hard predictions and focus on what is realy important.
        See, Joshua Tallent just spot on a “non epub check” glitch on an eBook
        I´ve made and asked him to quickly look but again, within two days,
        before he could reply, I had sold couple of hundreds without blast the
        market…and got good replies and so on…

      • http://www.facebook.com/luis.peaze Luís Peazê

        Hi Mike, no, I am not attempting to ridiculirize at all, I actually like
        your points of view that´s why I keep my eye here, but again if you
        felt that way in first place other than anything else productive I will
        look into what can be ridicule in it… I can then learn something.
        Taking the acid out it, look from a positive angle, “we all’ need to
        acknowledge that while dealing with two diferent things “books and
        business”, we gave in ourselves too easy to the second one but not
        specificaly to the book-business itself, to the hardware-tech-business
        instead, those guys have noting to do with book at all, only with what
        can sell to “click-person-types” and it takes a lot of  coffee, or wine,
        to discuss. Bottom line, disruption happens at every fractal of life,
        otherwise we wouldn´t loose our hairs, don´t we? Let´s just keep in the
        middle when make hard predictions and focus on what is realy important.
        See, Joshua Tallent just spot on a “non epub check” glitch on an eBook
        I´ve made and asked him to quickly look but again, within two days,
        before he could reply, I had sold couple of hundreds without blast the
        market…and got good replies and so on…

      • http://www.facebook.com/luis.peaze Luís Peazê

        Hi Mike, no, I am not attempting to ridiculirize at all, I actually like
        your points of view that´s why I keep my eye here, but again if you
        felt that way in first place other than anything else productive I will
        look into what can be ridicule in it… I can then learn something.
        Taking the acid out it, look from a positive angle, “we all’ need to
        acknowledge that while dealing with two diferent things “books and
        business”, we gave in ourselves too easy to the second one but not
        specificaly to the book-business itself, to the hardware-tech-business
        instead, those guys have noting to do with book at all, only with what
        can sell to “click-person-types” and it takes a lot of  coffee, or wine,
        to discuss. Bottom line, disruption happens at every fractal of life,
        otherwise we wouldn´t loose our hairs, don´t we? Let´s just keep in the
        middle when make hard predictions and focus on what is realy important.
        See, Joshua Tallent just spot on a “non epub check” glitch on an eBook
        I´ve made and asked him to quickly look but again, within two days,
        before he could reply, I had sold couple of hundreds without blast the
        market…and got good replies and so on…

  • Luis Peazê www.luispeaze.com

    Hi Mike, no, I am not attempting to ridiculirize at all, I actually like your points of view that´s why I keep my eye here, but again if you felt that way in first place other than anything else productive I will look into what can be ridicule in it… I can then learn something. Taking the acid out it, look from a positive angle, “we all’ need to acknowledge that while dealing with two diferent things “books and business”, we gave in ourselves too easy to the second one but not specificaly to the book-business itself, to the hardware-tech-business instead, those guys have noting to do with book at all, only with what can sell to “click-person-types” and it takes a lot of  coffee, or wine, to discuss. Bottom line, disruption happens at every fractal of life, otherwise we wouldn´t loose our hairs, don´t we? Let´s just keep in the middle when make hard predictions and focus on what is realy important. See, Joshua Tallent just spot on a “non epub check” glitch on an eBook I´ve made and asked him to quickly look but again, within two days, before he could reply, I had sold couple of hundreds without blast the market…and got good replies and so on…

  • Luis Peazê www.luispeaze.com

    Hi Mike, no, I am not attempting to ridiculirize at all, I actually like your points of view that´s why I keep my eye here, but again if you felt that way in first place other than anything else productive I will look into what can be ridicule in it… I can then learn something. Taking the acid out it, look from a positive angle, “we all’ need to acknowledge that while dealing with two diferent things “books and business”, we gave in ourselves too easy to the second one but not specificaly to the book-business itself, to the hardware-tech-business instead, those guys have noting to do with book at all, only with what can sell to “click-person-types” and it takes a lot of  coffee, or wine, to discuss. Bottom line, disruption happens at every fractal of life, otherwise we wouldn´t loose our hairs, don´t we? Let´s just keep in the middle when make hard predictions and focus on what is realy important. See, Joshua Tallent just spot on a “non epub check” glitch on an eBook I´ve made and asked him to quickly look but again, within two days, before he could reply, I had sold couple of hundreds without blast the market…and got good replies and so on…

  • http://www.facebook.com/luis.peaze Luís Peazê

    Hi Mike, no, I am not attempting to ridiculirize at all, I actually like your points of view that´s why I keep my eye here, but again if you felt that way in first place other than anything else productive I will look into what can be ridicule in it… I can then learn something. Taking the acid out it, look from a positive angle, “we all’ need to acknowledge that while dealing with two diferent things “books and business”, we gave in ourselves too easy to the second one but not specificaly to the book-business itself, to the hardware-tech-business instead, those guys have noting to do with book at all, only with what can sell to “click-person-types” and it takes a lot of  coffee, or wine, to discuss. Bottom line, disruption happens at every fractal of life, otherwise we wouldn´t loose our hairs, don´t we? Let´s just keep in the middle when make hard predictions and focus on what is realy important. See, Joshua Tallent just spot on a “non epub check” glitch on an eBook I´ve made and asked him to quickly look but again, within two days, before he could reply, I had sold couple of hundreds without blast the market…and got good replies and so on…

  • Popnfresh100

    Mike-

    Are you familiar with the work of technology theorist Geoffrey Moore (Crossing the Chasm, the Gorilla Game)?

    One of the key themes in his books is the “‘chasm” that tests most new technologies.

    It happens because people basically fall into four categories when a new technology is introduced. 

    First come the early adopters- who buy into a technology simply because they see great potential, and want to be a part of something big, even before the potential is even realized.

    Then you have the early majority- who aren’t in any way resistant to the new technology, but who also could care less about being part of some revolution.  They will buy into the new technology only when it is clearly a better value than the existing alternative.

    The late majority, resist the new technology initially- even past the point at which their objection is even reasonable- but eventually warm up to the new tech because they see most others have adopted it.

    And finally the skeptics- who will NEVER buy into the new technology no matter how great it is or what anybody else says.

    Between the time that early adopters buy into the technology and the time the  early majority buy into the technology is the chasm.  A period in which new technologies encounter great resistance to growth, seemingly out of nowhere.  This is because the early majority don’t think like early adopters.

    Marketing tactics that worked before – bandwagon jumping – now fall flat.  Because the early majority don’t buy things because they are popular, they buy things because they are GOOD.    The early majority doesn’t buy a product the day it is launched- they wait until they need one.  This slows the market momentum of the new technology.

    And it flummoxes the early adopters- who DO care about product momentum.  They then abandon the technology themselves and search for the next big thing.  That’s the chasm.  Only very strong technologies make it across.

    Anyways, that comes to mind as I look at the state of the ebook market right now.  The chasm approaches.  Will ereaders fall into it?  Tablets?
    —————————————————————————————-

    I also think your “death spiral” throws an odd curveball into the picture.  The early majority doesn’t care about the ultimate fate of bookstores- they just pick the best option right now- but the late majority does.  If it appears the printed word is truly going obsolete, ebooks can cross the chasm by appealing directly to the late majority.  This is what happened with digital music.

    But I don’t think that will happen with books- “obsolete” to the late majority means the old technology has become noticeably difficult to use in its own right – not merely that the alternative has widened the gap. 

    As a friend of mine recently said “At least I can still READ the books I bought at Borders”. 

    That’s not something everyone can say about the LPs they bought at Tower Records or the VHS tapes they bought at Blockbuster.

    • /blog Mike Shatzkin

      Yes I know about Moore’s work and his paradigm.

      What complicates the analysis as far as books are concerned is that they are not one thing, but many things. So it is not one adoption of new technology, but actually several. A further complication is the change of availability, particularly as bookstores close. So the reasons for adopting change with those circumstances, even though the characteristics of the printed book and ebook won’t have changed.

      Mike

      • Popnfresh100

        Those are good points.  And the industry is very sideways right now.

        I’m 100% sympathetic to the starfish/ discovery problem for suppliers with bookstore closures.  Fewer bookstores make it harder for publishers to find readers.  But that’s a supply side problem.

        On the demand side, bookstores closings don’t force adoption of ereading at all – printed books are more available than ever- any one can order any title they want online.  New or used, from Amazon, from Barnes and Noble, from hundreds or thousands of independents or even directly from the publisher.

        In short- no paper lover anywhere is being forced to adopt digital reading.

        But bookstore closings DO reduce distribution of non-Kindle ereaders.  Which is 50% of the ereader market.  And big-box electronics store closings cut across the entire ereader and tablet market.

        To put is another way, I own a nook, I’m very happy with it.  But if Barnes and Noble were to stop making it for any reason, I’d rather go back to paper than adopt the Kindle or ibooks.

        I imagine a lot of the Kobo customers felt the same way when Borders went down.  Ditto Amazon if they cut back on Kindle production.

      • /blog Mike Shatzkin

        I know everybody’s different. I am reminded of that all the time when I learn how few people read on an iPhone.

        But I have to admit that I find it very counterintuitive that somebody would switch from one ereader (the Nook) back to paper rather than switch to another ereader. I can’t see much difference in functionality and I don’t think most people view this as a political or social statement. I suspect you are representative of as few other people as I am.

        Mike

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