Enhanced ebooks

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.

Share this post

It is customary for those of us who do crystal-ball gazing to make some calls about the year ahead at around the time the celebrants head for Times Square. I am not a man to flout custom. Here are some of the things I expect we’ll see in 2010.

1. At least one major book will have several different enhanced ebook editions. This will result from a combination of circumstances: the different capabilities of ebook hardware and reader platforms, the desire of publishers and authors to justify print-like prices for ebooks, the sheer ability of authors and their fans to do new things electronically, and the dawning awareness that there are at least two distinctly different ebook markets: one just wants to read the print book on an electronic screen and the other wants links and videos and other enhancements that really change the print book experience. (Corrolary prediction: the idea of an enhanced ebook that is only sold “temporarily” in the first window when the book comes out, which has been floated by at least one publisher, will be short-lived. Whatever is made for sale in electronic form will remain available approximately forever. Or, put another way, if you have a product that requires no inventory investment that has a market, you’ll keep satisfying it.)

2. Here come some new retail book outlets, but can publishers afford the risk of selling to them? The growing incidence of bookstore-less cities will provoke the mass merchants to explore a greatly increased title selection inside their stores as a magnet to attract disenfranchised bookstore customers. The early emphasis will be on children’s books and illustrated how-to: books for which there is high value to seeing them before buying them. They might even see this expansion as a margin-booster because if they’re responding to scarcity (as they would be), then discounting might not be as necessary as it is with their bestseller-only strategy now. Publishers will be wary of this new initiative, knowing that it could fail and lead to large returns but it will be on the drawing boards by the end of 2010.

3. Thanks to digital, there is no minimum length for a book anymore. Ebooks that are too short to be print books will become a real factor in ebook sales, opening up new opportunities for publishers but even more for authors. Short fiction is already well established in the romance genre and some major publishers have broken out stories from anthologies as separate items to be sold on Kindle. In 2010, authors and agents will discover that shorter-than-a-book works can be the subject of useful experimentation and learning through electronic publishing and, by the end of the year, it will become a frequently-employed device. Periodical media (newspapers and magazines) will also see this paid delivery mechanism as an alternative worth experimentation for them as well. After all, if a big publisher can unbundle a short story anthology to sell the individual stories as Kindle editons, why couldn’t The New Yorker sell the short fiction it publishes that way as well? This concept has been tipped by the announcement in 2009 than the web site Daily Beast will be delivering shorter books in a timely manner through electronic distribution.

4. Ebooks will require a new industry directory (and it won’t be printed.) Driven by new entrants in the field, self-publishing, and unbundled aggregations of print books, the gap between the items listed in “Books in Print” and the items that should be listed in a directory of “Ebooks Available” will continue to grow. There has been a robust conversation in a corner of the book community about whether all ebook editions need ISBNs, but that’s really only one part of a much larger metadata problem. In 2010 we are likely to see at least one serious effort to deliver a new online directory for ebooks.

5. Big publishers start to match their offerings to their marketing capability. The rearrangement of the big publishers’ IP portfolios will begin in 2010 as they emphasize what they do best: deliver narrative-writing and children’s books to multiple outlets in large quantities. This reshuffle will only begin to be evident in 2010, but we will see small slices of big publishers’ lists sold or licensed to specialist small publishers and we will see the beginnings of genre consolidation among the big publishers, with some publishers beefing up and others exiting romance, science fiction, and mystery. In 2010 the latter will take the form of list growth or cutbacks, not the sale of whole lists to a competitor. We’ll see that in 2011 or 2012.

6. Ebooks become significant revenue contributors for many titles. By the end of 2010, ebook sales will routinely constitute at least 20% of the units moved for midlist and the lower tier of bestsellers and at least 10% of the units for really big bestsellers. (These are predictions for narrative writing; illustrated books and kids’ picture books will lag considerably.)

7. Circumstances will outrun the ebook “windowing” strategy. By the end of 2010, the experiment with “windowing” ebooks — withholding them from release when the hardcover comes out — will end as increasing evidence persuades publishers and agents that ebook sales (at any price) spur print book sales (at any price), not cannibalize or discourage them and, furthermore, that this withholding effort does nothing to restrain Amazon’s proclivity for discounting. (Amazon can’t quit with so many competitors joining them; see number 11 below.) There will also be steadily increasing evidence that most readers distinctly prefer either digital books or paper for their narrative reading and the real minority is the people who routinely read both.

8. In the digital world, geographical territories will be found not to make much sense. The problem of managing territorial rights for ebooks will be a growing problem the industry will have to deal with. As ebook platforms are increasingly separated from dedicated readers (a move even Amazon encourages with its Kindle software working on PCs and iPhones by the beginning of 2010 with more to come throughout the year), people all over the world express their frustration about books they are blocked from obtaining by obsolete rights regimes. With the number of ebook platforms and outlets increasing, it becomes almost impossible to police these rights effectively. Authors with global audiences become increasingly sensitive to the frustration of their fans and, through their agents, lobby for “open markets” for ebooks to solve the problem. US publishers back the idea and smaller market publishers hate it, but by the end of 2010 it is obvious that territorial rights will be relegated to print books only, meaning the end could be in sight for the entire concept of territoriality (but, because of old contracts and lots of national laws, it will be a very long sunset.) Pushing back against this concept might be publishers in countries with large English-language populations (Israel comes to mind, but I know publishers getting offers from Nigeria) who want to carve out a national monopoly for their own local editions in English. But that would be print-only.

9. Authors with clout start looking more like publishers. Some authors who have developed huge followings on Facebook and Twitter and their own blogs start to demonstrate that they can have a serious positive impact on the books of other authors they favor. This leads to a variation on the time-honored practice of getting blurbs and jacket quote-lines as savvy editors and agents suss who the new author-megaphones are and line up to get their support. The prediction for 2010 is that this will start to become obvious. The likely prediction for 2011 will be that this leads to authors becoming quasi-publishers or, perhaps, getting “imprint” deals from established houses to select and promote other people’s writing.

10. The “shakeout” in ebook delivery mechanisms won’t start this year; proliferation rules in 2010. With the arrival of Google Editions in the first or second quarter of 2010, there will be multiple channels to the ebook market through a variety of players: Google, Amazon, Apple, Baker & Taylor’s Blio, Kobo (formerly Shortcovers, the ebook operation begun by Indigo of Canada), and Sony will not be alone! During the course of 2010, the industry will become aware that there are three moving parts here: the device ebooks are viewed on, the ebook “reader” software the device employs, and the retailing and merchandising experience for the consumer shopping (or searching) for a particular book. As it becomes clear that ebook readers employ multiple devices and can accept a variety of platforms, the shopping experience will become appreciated as the most important determinant of consumer loyalty for most books. This is a moving target; everybody will be working on it. But as we enter 2010, it looks like Kobo has figured this out better (so far) than anybody else.

11. Retailers will demonstrate that they have more at stake with each file they sell than the revenue from that sale. Because there are so many players fighting for a foothold in ebooks, discounting them deeply will be the “new normal.” This will enable publishers to keep their “established” retail price (and their revenue per unit sold) high, but consumers will increasingly see ebooks as the less expensive alternative.

12. We will see greater integration of ebook offerings with other products and services. The merchandising challenge for ebooks will ultimately be met web page by web page over the entire Internet. This future paradigm will be tipped in 2010 when we start to see ebook stores on more and more non-book web sites, each trying to deliver some sort of value-add with curation or follow-on products.

13. Book publishers will have to admit to real confusion about what the product is that they produce. The big meme coming out of 2010 will be “what is a book?” Publishers will increasingly be releasing productions that contain video, audio, animation, slide shows, and interactive game elements. Movie, TV, and game producers will see an alternate marketing and revenue channel available through “ebookifying” content they have and moving it through book channels like a “tie-in.” Where one stops and the other begins will become increasingly difficult to see (and increasingly irrelevant).

Share this post

This is the third and final post of a series which spells out a new ebook strategy for trade publishers, expressed in the form of a letter from the publisher to its authors. The first post — the beginning of the letter — expressed the publisher’s intention to invest in a database of digital assets to enhance all their ebooks, and to take advantage of the different opportunities presented by different ebook formats. It also was candid about how little the publisher really knows about what the revenue potential will be for ebooks. The second post covered the first item we anticipate the author will want to know: “what is an “enhanced ebook.”

This post covers the second and third items: what’s required of the author to get this done and what is the deal between the author and our imaginary entity, National Trade Publishing (NTP).

Obviously, there is only a limited amount National Trade Publishing can do to enhance an ebook without help from you and our other authors. So what do we need from you to really make this happen?

That answer breaks into two parts: things of value we think you have from the process of creating the book and value we think you can add after publication.

Do you have bibliographic material or sourcenotes that we won’t be including in the book? Have you archived links to source or related material on the Web? Did you write descriptions of characters or places in your book that you wouldn’t mind revealing, and which would be of interest as extra material to some of the people who will read your book?

We will give you the opportunity to contribute to each ebook’s underlying dictionary. Will you use it?

Video and audio material are welcome. You can talk to your audience about this book, or the next book you are working on, or even another book you’d recommend to them. We’ll give you guidelines for what we think will work best (brief, in a word) and we’ll be screening for adequate quality and appropriateness, but we want to give buyers a “From the Author” section of an enhanced ebook that gives you a lot of leeway.

We want to use the “space” we have in an ebook to tell readers more about the book you’ve written, about the world of the story (if fiction) or to give them a broader or deeper drive into the subject matter (if non-fiction). That can be done through your writing or by things you can refer us to, through things on which we can get the necessary rights to embed them or through things we can only link to. And through any media.

Which brings us to the trickiest part of all this: what’s the deal? (Blogger’s note: I am going to put some numbers in here. The numbers aren’t as important as the conditons and circumstances around the numbers.)

Our standard deal for ebook sales is to give the author 25% of the net amount received by National Trade Publishing.We’re not going to change that. We’ll pay the same on these enhanced ebooks, even though some of the material, such as the dictionary, will be provided by us.

In addition, we will ask only non-exclusive rights to the enhanced ebook material. If you write something original for this purpose, you can give it to us and then re-sell it as part of something else, as long as our rights to sell the ebook we’ve created are undisturbed. Although we certainly can “pull” material from an ebook much more readily than we could from a book we are storing in print in our warehouse, the administrative cost of doing such a thing across our list would be uncontrollable. (Hint: we can negotiate an ability to pull material if you pay us something to do so.)

We recognize the potential for advertising in an enhanced ebook, or for promoting another book and benefiting by referral revenue from its sale. We will give authors veto power over accepting these revenue enhancements in their ebooks, and we will share 25% of the value of that advertising or referral revenue. If you bring us the advertiser, we’ll pay you an extra 10% of the revenue.

We will be entirely in control of the pricing of the enhanced ebooks, of course. Our strategic desire is to drive UP the price we can get for them, but, tactically, we may price them anywhere, or give them away in a promotion, or give them away as part of the ebook sale.

We’ll want to allow TTS use of the ebook wherever it is available, but we’ll block its use where we have that option at an author’s request.

So the “deal” we’re looking for is that we’ll each put forth extra effort to promote our still-primary product, your book, and to develop a better understanding of what the future primary product, the enhanced ebook, might be. We expect many of our authors to be enthusiastic about this idea from the beginning, and for many of the others to join with us gradually as we develop this concept. We hope you’ll be our partner in this effort from the start.

PS: Since I started this series of blog p0sts, I learned about a peer-reviewed study of ebooks created by John Warren of the Rand Corporation. John’s article is very thorough and reviews important points about ebook capabilities, including hyperlinking and multimedia, and about pricing experimentation that are not covered in my series of posts. However, it does not cover what I consider to be the central point of my pieces: which is that a publisher needs to set up a database and a new interaction with authors to really move into the ebook era. The book-by-book approach, which is normal and which is what the Warren piece also assumes, will not be cost-effective for consumer ebooks for some time, perhaps years.

Share this post

The question asked on an email list of digerati-types was:

“On the trade side of the business, what are some of the unmet challenges, the unsolved conundrums, at the intersection of books & technology? If you could fix something, what would you fix?”

Share this post

I want to try to lay out a strategic approach to enhanced ebooks which I believe is more extensive than any general house has shown an inclination to pursue so far. I thought the clearest way to express this would be as a letter to an author which is, after all, how a strategic approach would have to begin. (For the purposes of this exercise, I’m sidestepping the obvious requirement to address authors through agents. The best approach would be to introduce the idea through a consultative process with agents and authors to bandwagon some advance support, but we’ll ignore that as well for the moment.)

I also want to stress that I’m thinking this through in here from the perspective of the general trade publisher: one not yet focused on niches and one whose brand is not a consumer brand. I don’t expect houses like Wiley, O’Reilly, or Harlequin to see as much of a gap between what is said here and their present practices as those houses that dominate the bestseller lists and have the most high profile authors.

Because I believe in short posts, and this publisher-to-author letter would not be short, I am going to break it into pieces, sort of a Dickensian approach to telling the story but without the frequent introduction of new characters. This first piece explains the overall strategy for a house-wide approach to “enhanced ebooks” by a notional company I’ve called National Trade Publishing. And it tries to make the case to the author to participate in the spirit necessary for the times: the spirit of experimentation.

Dear NTP Author,

As you know, the fastest-growing market for publishers and authors today is in ebooks: electronic files carrying the content that we have always sold in printed form. Although it is growing the fastest, and has been for years, the ebook market still only accounts for about one percent of our sales (and probably, of yours.) But because we believe that these sales could well reach 10% in the next few years and grow even faster after that, and because we believe that ebooks will be adopted first by many of the most important parts of our audience (and yours): reviewers, writers, and other thought leaders, we at National Trade Publishing are initiating new efforts to deliver a more robust ebook program. This presents opportunities for all our authors that I hope you’ll take advantage of.

There are three important things we want all our authors to understand about ebooks:

1. They present the opportunity to deliver additional content and features to consumers with no additional run-on production cost. Traditional printed books cost something additional for every extra page we put into them; ebooks don’t. (This doesn’t mean ebooks add no costs: the enhanced ebooks we want to do will require a little additional effort from authors and some real developmental effort from us. This letter is just the start of us expending real resources to try to make something new happen.)

2. We don’t know anything yet about how ebook pricing will ultimately work or, put another way, how well either authors or publishers will do as ebook unit sales rise. Publishers, ourselves included, have endeavored to keep ebook prices close to print book prices and, for the most part in the consumer book area, to sell individual titles the way we have in print. But we see pressure on the pricing and we also see the likelihood that various bundle and subscription models might become very important in the book world. So we’re going to need flexibility in how we price these enhanced ebooks. We’ll need modifying contract language to enable that.

3. We speak of ebooks as if they are one thing, but they’re not. Most ebooks today are still read on desktop and laptop computers; only a minority of sales are for handheld devices like iPhones or Kindles. We expect this to change; Kindle is having a big impact on changing it. What this means is that what an ebook can do: whether it can “show” video, make use of outbound links, deliver clear images (even in black and white, let alone in color) is variable. We can’t give the same capabilities to somebody on a Kindle as we can on a PC. And what we can give somebody on an iPhone (and ultimately a Blackberry or an Android) may depend on whether the ebook platform is a Stanza reader or a Scrollmotion reader.

So, with all that in mind, National Trade Publishing is building a dynamic database of resources — digital assets — to make the best possible ebooks in all possible formats, as we learn what that means and what it will take to do it. We are offering you the opportunity to collaborate with us to invent the future and, of course, to share appropriately in the rewards. We are also offering you the opportunity to collaborate with other NTP authors in marketing through your books and theirs, but only if you choose to.

(To be continued…but not tomorrow)

Share this post