Google Editions

An ebook of the first two years of The Shatzkin Files is now available and will be linked for the forseeable future from our left nav bar. This post is the introduction to the ebook, which explains how it came about.

My friend, Joe Esposito, first told me about blogs in the early part of the first decade of the 21st century before just about anybody else I knew had heard of them. I am not sure why it took me many years to start one of my own.

I’ve been training for this gig for a lifetime. My Dad insisted that I learn to touch-type when I started fooling around with a typewriter at the age of 8. (As he said, “either we teach him the right way, or he’ll teach himself the wrong way.”) Three months of twice-weekly lessons got me up to 42 words a minute on a manual typewriter, but trained my fingers to do the right thing so that today on a computer I can do about 3 times that speed. By the time I was 11, I was filing copy on a weekly basis on the Little League games for our local newspaper. I got paid too: 15 cents a column inch. The newspaper job actually continued for the next several years as I moved on to covering high school sports.

In my junior year of college, I started writing a weekly column I called The View from Underneath for the UCLA Daily Bruin. I don’t know how good it was or how many people read it, but it got me a certain amount of notoriety. Because of the column, I networked my way into the Bobby Kennedy presidential campaign and, after his death, a slot as an assistant to Pierre Salinger on the 1968 McGovern effort at the National Democratic Convention. (That was the one in Chicago that featured police against protestors in the streets and which villainized Chicago’s first Mayor Richard Daley to that generation of young liberal activist Americans.)

Between the end of The View from Underneath and the commencement of The Shatzkin Files blog, 40 years passed. I did plenty of writing in the meantime: some books (mostly about baseball), a bunch of articles about publishing in trade publications in many countries, and, starting in the mid-1990s, speeches on publishing and digital change delivered at industry forums and then preserved on my website. The posted speeches were a great boon to my professional career, making it possible to build credibility (and “brand”) among people who never attended these live events.

Others I know had blogged daily, or almost daily. Richard Charkin, now Managing Director of Bloomsbury, wrote every day when he was head of Macmillan. My friend Gwyn Headley, Managing Director of the stock agency fotoLibra, told me that when he started blogging, he did so with a list of 365 topics in hand so he’d always have something to choose from on a day he wasn’t feeling creative. Richard gave up his blog when he changed jobs and I don’t think Gwyn kept up the daily habit very long either.

In my case, I blogged six times the first two or three weeks, then five times the next few weeks, and it diminished from there to what is now a one or twice weekly post. It seems like it usually takes me about 1500 words to get in and out, although some posts run a bit longer. I find that I need to review what I’ve written at least three times a few hours apart after I think I’m done to make sure I’m happy with it. Occasionally, a post gets to that point and gets scrapped.

As I think must be normal with these things, the audience for the blog just grew. As of this writing, The Shatzkin Files has about 1700 subscribers who get the blog delivered as an email to their inbox. A number generally ranging from half that to twice that (and occasionally, quite a bit more) reads the posts on the site. The comment strings keep getting longer.

Fortunately, one of my regular readers is Cameron Drew, who, like me, came into the book business through the most honorable possible path: working for his father. I knew David Drew, one of the great book sales reps of my generation, long before I ever met Cameron. Since Cameron has gone to work for Kobo, the global ebook retailer spawned by Canadian retailer Indigo, he and I have seen each other at conferences and trade shows. He told me from the very beginning that he was a loyal Shatzkin Files reader.

Early in 2011, Cameron told me he often found it useful to refer back to previous posts of The Shatzkin Files but that doing so through the website was clunky and difficult. “Your stuff should be collected into an ebook,” he said. “If we did it at Kobo, would you give us a 30-day exclusive?”

I was extremely flattered. “I’ll happily give you 60 days,” I said.

And thus we have this ebook.

If you live in the world of trade book publishing — the publishing that has reached its audience primarily through bookstores for about 100 years — you know we are all in a different world than we were in when I began The Shatzkin Files blog in February, 2009. One of the early posts speculated that it might be  harder for Amazon to hold onto their stranglehold on ebook sales than their hegemony on online print sales. At the time, Kindle was extending its dominance of the ebook marketplace by enabling the Kindle owners to access their ebook content through the iPhone and other devices. And Amazon’s pricing policy of selling below their cost was beginning to scare publishers.

Then, around the first anniversary of the blog, Apple’s iPad and the iBookstore arrived on the scene, offering publishers the opportunity to implement the so-called “agency model,” under which the discounting of ebooks is effectively stopped. I attribute to that tactic, along with the introduction of the iPad, the Nook, Kobo and Google Editions, the stabilization of ebook distribution in a multi-retailer market with evolving global competition. So, two years later, it looks like that early post was right.

We’re going to see a lot more change in trade publishing in the years to come. I expect the next two years to present even greater challenges and more drastic change than the last two years have. Since The Shatzkin Files began, the extremely challenging times we’ve expected for bookstores have become very evident. Over the next two years, the extremely challenging times it has seemed to me must follow for general trade publishers will probably become equally evident.

One thing worth using this introduction to say is that I take no pleasure in the big publishers’ pain. It is a matter of professional pride to me to not allow my preferences to color my predictions. I love bookstores and libraries and consider the top management of the big trade houses to be intelligent, ethical, and creative people. I consider many of them friends. The fact that the transition from reading and distributing print to largely reading on screens and distributing print online makes much of their skill sets and business models obsolete is not their fault. Nor is the fact that preserving their old business, and the cash flow it still yields, sometimes interferes with inventing the new one.

There are serious initiatives in the big houses to acknowledge the importance of verticalization (mostly in genres), to create direct contact with audiences, and to employ scale in search engine optimization and in locating customer clusters online that it is hoped will enable a new version of the horizontal, big book publisher model to leap the chasm of change. At the same time, the big publishers are figuring out how to step back from the enormous overheads associated with doing business the way they have for the past 100 years. How much change is sufficient, and how fast is fast enough, are questions we’ll only know the answers to with the passage of time.

Share this post

Ed Nawotka, the editor of the Frankfurt Book Fair’s online publication “Publishing Perspectives”, is running a series of pieces responding to his question “what was the most dramatic event in publishing in 2010?” Here’s the answer from The Shatzkin Files.

The most dramatic event in publishing in 2010? That’s easy. It was the face-down between five of the six biggest publishers in the US and Amazon over trading terms in the ebook marketplace: the shift from wholesale pricing to agency.

Even in theory, the shift was complicated. Publishers’ established prices went from near-print to about half-print. Margin offered to the channel was reduced from 50% of the established price to 30%. Control of pricing shifted from the retailer, who could charge whatever it wanted in the wholesale scenario, to the publisher who required the same price across all consumer touchpoints under agency.

But in practice it was even more complex than it was in theory. Shift of pricing control meant shift of responsibility at the point of sale and that meant publishers were now responsible for sales taxes, not the retailer. (Oddly enough, and the lack of public discussion of this point is a dog that didn’t bark, it did not result in the publisher, now seller-of-record, being told exactly who the customer is: the name and email address are still only known to the retailer.) Lawyers advised (at least some) publishers that agency required a contractual relationship between the publisher and each point of distribution, resulting in deal-making complexity that leaves some retailers without a full shelf of agency publisher books more than six months after the shift.

And literary agents representing the top authors required a lot of handholding. Ebook royalties are a raw point in negotiations these days between agents and publishers, and the agency model reduced the royalty per copy on all books, at least during their hardcover life. Of course, the publishers’ take per copy also was reduced, a point the publishers no doubt made as they prevailed on the agents to accept a change they believed was necessary to prevent a potential perpetual monopoly on ebook sales by Amazon.

Adding to the drama surrounding the shift to agency was the fact that the biggest of the Big Six trade houses, Random House, sidestepped it. This put them in a position where they a) sell their books for more per unit, b) see their books offered to the consumer for less per unit, c) can tell agents their royalties are higher per unit, d) are not offered in Apple’s iBookstore (but are available on all Apple devices through Kindle, Nook, and Kobo, at least), and e) have earned the enmity of the other publishers in the Big Six.

The Agency 5 see themselves, not without reason, as having sacrificed revenue at a difficult time for the industry’s long run good while Random House takes tactical advantage of the shift (and, in the words of one CEO, are “gloating” about it.)

(My editorial comment: this may all be true, but isn’t it the job of a company’s management to take tactical advantage of changing industry conditions? The overall point to this piece, of course, is that I applaud the move to agency. But it is hard to see exactly why, from Random House’s point of view, you’d voluntarily give up an advantage that makes all your competitors grind their teeth. As some analysis I did looking at royalties shows, the tactical advantages of wholesale are distinctly greater for hardcover and it may even be disadvantageous for paperbacks, but that’s a balance Random House is very capable of calculating.)

The most dramatic single moment of this long-playing dramatic event was last January when Amazon made a brief, and vain, effort to stop the whole agency movement in its tracks by pulling the buy buttons for Macmillan, apparently because they were the first publisher to officially notify Amazon of the forthcoming change. The giant retailer retreated in about 48 hours marking the first time in anybody’s memory that the publishers had forced them to back down.

Although the Nook and iPad devices certainly have something to do with it as well, agency seems to have accomplished its purpose of preventing Amazon from maintaining a stranglehold Kindle share through their deep-pocketed ability to forgo margin for a pricing advantage. The other retailers in the ebook market have their margin protected. With Google Editions still to join the fray, there is reason to believe that there can be a truly broad-based ebook marketplace for the next few years. What the Agency 5 publishers did was politically and logistically difficult and, because it involved reducing unit margins, somewhat counterintuitive. It would appear more than six months later that the tactic has achieved its most desired result.

Control of pricing immediately challenges publishers to get sophisticated, modern, and scientific at how they approach pricing. That would require, in a formulation I first heard from Peter Wiley (Board Chair of John Wiley & Sons), “constant, controlled experimentation.” Surely, that is taking place on a daily basis at Amazon.

So far, of course, the sales agent is controlling all the customer contact. Sooner or later that is likely to become a point of contention between publishers and their “sales agents.” It might be pushing things to expect that dispute to begin with the next round of agency contract negotiations in 2011, but expect that issue to make its way to the table in 2012 or 2013.

Share this post

A few things worthy of a pre-Thanksgiving comment have passed in front of my eyeballs in the past few days.

1. Sainsbury’s, one of the big supermarket chains in Britain, has announced that it will open a digital download store before Christmas. They’re starting with movies and music, but plan to expand to ebooks before long.

The working assumption has been that Amazon, Apple, and Google (even though Google Editions hasn’t launched yet) would be the major global players for ebook distribution. Barnes & Noble has taken significant market share in the US, putting them second in sales to Amazon at the moment. There are rumors that B&N is going to start competing globally before long; it would certain make sense for them to do that. (Perhaps B&N’s aggregation of books in Spanish is a step in that direction.) Sony and Kobo are already active all over the world; Copia intends to be and they have just opened for business.

But if Sainsbury’s wants to be in this business, so might mass merchants in every other corner of the globe. We had already had our eyes opened by a French publisher who expressed his fervent hope that local French book retailers would carry English-language ebooks. His reasoning was very simple. Since Amazon, Apple, and Google would be carrying ebooks in French as well as English, the local merchants won’t be competitive unless they carry English as well as French.

There is a tendency in some quarters to declare the ebook wars over and that somebody (usually Amazon or Apple is the one annointed) has “won.” It is important to remember that ebooks have about 10% pentration in the US and less than 1% everywhere else (except, as we’ll see below, China). Many more players will be competing for the ninety-something-percent of the 2015 world’s ebook readers that haven’t tried it yet.

2. A story in China Daily puts the Chinese digital publishing business at $12 billion and at more than half of the Chinese book business. I have some immediate skepticism about these numbers since the US book business (all in: trade plus school plus college plus professional plus anything else you can think of) is only $30 billion and the US ebook business was just estimated by Forrester to be $1 billion. For China’s book business to be 80% or more of ours in total and for China’s digital publishing business to be 12 times ours seems very unlikely, if not impossible. Who knows what errors of methodology or currency conversion could explain these numbers? (I surely don’t.) But half digital is a powerful statement, even if the comparison with the US can’t be right.

The fact that China has moved so fast to digital opens up another line of thought to me: how translation might work in the future. Google Translate doesn’t deliver you a publishable version of anything. But it does deliver an intelligible version that a good writer or editor can turn into something publishable pretty quickly. How long can it be before a combination of Google Translate and a single literate person is delivering a perfectly acceptable translation of anything to anybody who can afford the single literate person?

(Added after publication: you’ll see a comment below pointing out that the statistics in the China Daily article referred to all publishing in China, not just book publishing. That makes the figures make more sense. It also means that much of what appears in the two paragraphs above has been mooted, except that Google Translate plus one good editor can deliver a readable version of anything in any language.)

3. Sarah Weinman, who is one of the more acute analysts of the commercial realities of digital publishing, just wrote a piece wondering whether the iBookstore is actually working. She suggests that iBookstore is trailing both Amazon Kindle and B&N Nook by a considerable amount in sales. She has data from one particular book for which the ebook sales were about 60% Amazon, 26% B&N, and only 6% iBookstore. When I asked a few publishers how those percentages broke down about four months ago, they put Amazon closer to 50% than 60% and put B&N and iBookstore pretty close to each other. The iBookstore, which I call the Walden or B. Dalton mall store of ebooks, has been a head-scratcher for me. They have far fewer titles than their competitors: Amazon, B&N, and Kobo. While they do a nice job of title presentation for the bestsellers, their lack of breadth is evident if you do any kind of subject or genre search. Meanwhile, Amazon’s very tough position (so far) resisting agency for any but the biggest publishers makes it very difficult for smaller publishers to put books in the iBookstore without exposing themselves to the danger of conflicting contracts and a downward spiral of revenue if Amazon decides to discount their books. (I have been told lately by two small entities that they’re going to get agency terms from Amazon; one actually wonders why Amazon would permit that right now since their current strategy seems to be working to keep the iBookstore uncompetitive on title breadth.)

On the other hand, it has been pointed out by others that iBookstore is going to develop a big offshore following. The iPad is making inroads abroad faster than Kindle and Apple’s iBookstore is the only book purchasing experience that comes already loaded on the iPad device.

I would never expect iBookstore to go away, but I do wonder whether it will be a significant force in ebook retailing, ever in the US and, in the long run, anywhere, unless they are willing to back off on requiring agency terms from smaller publishers. Or unless Amazon will back off on requiring wholesale to that same cohort.

4. PW reported yesterday that HarperCollins is shutting down its ebookstore. While there could be any number of factors at play, one has to assume that sales were not robust. The guess from here is that the problem of not enough traffic from consumers is going to be a generic problem for general trade publishers. You can only get traffic as a horizontal aggregator if you are a complete horizontal aggregator. iBookstore can’t do it with a fraction of the titles that Amazon and Barnes & Noble have and neither can a publisher.

With our good friends at Market Partners International, we’ve just launched a questionnaire on Survey Monkey to learn from agents what ebook deals they’re making with publishers. We’ll balance our inputs by interviewing publishers on the same subject before Connie Sayre of MPI and I deliver what we’ve learned at Digital Book World in January. If you’re an agent and you haven’t received an invitation to participate in this effort, contact Jess Johns at Idea Logical (jjohns@idealog.com) and she’ll get you included.

Share this post

I had a chance this week to chat with a very smart person who works for a company that does a lot of business with book publishers. Some things articulated themselves in that conversation — one of my favorite collaborators, Mark Bide, has often observed that we “learn a lot by talking” — that seemed worth repeating for public consumption (while preserving the anonymity of my fellow conversationalist.)

What we talked about is the current situation with ebook distribution: agency model, wholesale model, and what is being called the “hybrid” model, but which I would simply call “a mess that won’t be sustained.” (It should be noted that this a pre-Google Editions conversation and analysis; when GE comes it will be disruptive and change many things, but, not knowing if it is coming next week, next month, or next year, this analysis is about where things stand now.)

Our conversation articulated five things worth repeating:

1. The “hybrid” model for ebook distribution, by which some publishers are selling to Apple on agency terms and Amazon on wholesale, is risky and likely won’t last.

2. Amazon is pursuing enlightened self-interest by forcing some publishers to the hybrid model.

3. The iBookstore could be in real trouble, and is going to find it difficult to build a title base that gives it a sustainable retail position.

4. Big publishers are forced into being disingenuous about their strategy, or what should be their strategy: keeping print sales through brick-and-mortar as robust as possible for as long as possible.

5. Amazon is also forced into being disingenuous about its strategy, or what should be its strategy: getting as many readers as they can hooked on the Kindle device because, as things stand, the only easy way to put a book on a Kindle is by buying it from Amazon.

The hybrid model

When Apple opened the iBookstore, they “insisted” on the agency model, in which publishers set the retail price across all accounts and pay a fixed percentage (reported to be 30%) from the “agent” whose web site brokered the sale. This differed from the wholesale model, in which the publisher “sells” the book to the web retailer who then re-sells it at whatever price it likes to the consumer.

Because Amazon has deep pockets and had the first successful ebook reader on the market, they were comfortable deep-discounting major bestsellers below their cost to build market share. (One should note that Amazon always claimed that they made up that margin on other books and always ran their Kindle file sales at a profit. What they told me once, not under NDA, was that 4% of the titles were deep-discounted below cost and they accounted for 25% of the sales. This data was from before iBooks and agency reduced the number of deep-discounted titles.)

When five of the Big Six publishers presented Amazon with their decision to switch to agency, Amazon agreed to the switch (after initially balking, famously pulling Macmillan’s buy buttons very temporarily), but only for the Agency Five. All other publishers had to remain on wholesale terms, allowing them to continue discounting.

A few publishers have responded by trying to execute on both models. This requires some pretty fancy gyrations, because the price the publisher establishes for an agency book (which is what the public will be required to pay) is considerably less — half or less than half — of the price a publisher establishes to base their discount if they’re selling wholesale. So a $30 print book might become a $30 retail price ebook for wholesale, with the store paying $15 and perhaps charging $9.99. That same book would have a $12.99 or $14.99 retail price in agency, with the publisher getting 70% of that (or about $9.09 or $10.49.) But that’s not what makes the model unsustainable.

The agency deal with Apple reportedly (I have never seen a contract) allows Apple to meet any price somebody else charges on the web. So if Amazon really does sell the book above for $9.99, and Apple matched it, they’d only owe the publisher $6.99! How long do you think Amazon would sit still for paying more than twice as much as a competitor matching their price? How long would you sit still for that?

I checked with one hybrid model publisher who had not faced this problem yet in any unmanageable way. Apple does let them know about books on which price adjustments are required, but so far the number of them has been very small and there have been no major bestsellers that would be very disruptive. But that publisher, and any other trying to execute on both models, must feel very vulnerable and, in a way, dread the runaway bestseller that could start a spiral of price-cutting.

Amazon’s self-interest

Amazon’s objective here is to discourage publishers from putting their books into the Apple store. In this, they appear to be having success. The iBooks store has become the mall store of ebook retailing: they have most of the bestsellers (not all, because they don’t have Random House) and not much else. Meanwhile, Amazon and Barnes & Noble (and Kobo, despite some bad press about their dealings with small publishers) are building larger and larger title selections. With price parity at the very least and a much larger title selection, and the fact that anybody who might use iBooks (an iPad or iPhone book reader) can just as easily buy their ebooks from any of the three other big resellers, Amazon’s tough stance is making many smaller or medium-sized publishers question whether they need to be in the Apple store.

What happens to iBooks?

It is hard for me to see much future for iBooks unless they soften their stance about buying only on agency or, even less likely, unless Amazon softens its stance about taking books from publishers smaller than the Agency Five only on wholesale terms. The gap between what they have to sell and what the other major retailers have will continue to grow. All three of the others (and Copia, for that matter, when they go live) can be read on many devices. Purchases from iBooks can only be read on an iPad or iPhone. Over time, the only reason I can think of for somebody to buy at iBooks would be to get the two-page spread reader capability on their iPad. If there is any other proposition that would attract a purchaser, I don’t know what it is.

Furthermore, Apple has not devoted nearly the resources that its competitors have to publisher contact to get more books. They have fewer people and less interaction with publishers. It’s as if they don’t really care if iBooks lives or dies. And maybe they don’t, since anybody who has one of their devices can read books to their heart’s content from Amazon, B&N, or Kobo on their Apple hardware.

What publishers can’t, or won’t, say

I have written and said many times, going back to 2007 and before, that big general trade publishers depend on a bookstore network for their survival. Their core proposition is “we put books on shelves”; that’s what requires the scale and expertise that they have and that nobody else can compete against. When retail shelf space goes away, there’s little a big publisher can do that can’t be duplicated by anybody with the cash to put together an ad hoc team of freelancers and graft them to some service providers.

But as the response to my “why are you for killing bookstores” post some months ago made clear, “defending the old model” is a very unpopular position that mainly just opens up an advocate to ridicule. No big publisher will say that it is their strategy to restrain ebook uptake to save print at brick-and-mortar, but they’d be pretty dumb not to be thinking it.

What Amazon can’t, or won’t, say

But if Amazon likes to ridicule publishers for price-setting without expertise (which they’re doing in an attempt to keep ebook prices up and restrain the movement from print to digital), they also don’t talk about their core strategy: converting as many readers as possible to the Kindle device. While you can buy from anybody if you read on an iPad, as a practical matter you can only buy from Amazon if you read on a Kindle. Every Kindle convert is a lost customer to every other retailer and etailer.

So while publishers say anything but “we need to slow down the switch to digital” when they talk about “maintaining the perception of value” or “the costs we incur for ebooks” as justification for their agency and pricing policies, Amazon is similarly disingenuous when they talk about pricing their Kindle editions. “Offering great value to the consumers” and “pricing according to scientific algorithms” are much more palatable explanations than “we’re trying to own as much of the market going forward as we can”.

I have a friend in one of the big houses who just analyzes the business and thinks about strategy all day long, one of the few jobs in a publishing house that I could possibly even do! He’s very smart. He tells me that he’s not persuaded that pricing ebooks higher deters people from switching over from print. I can believe that he sees that in the data, but I can’t believe that is true regardless of the price differential. Keeping ebook prices up is also about preserving revenue as the market shifts to digital, but from here the hunch is that it is also, perhaps only in a very small way, keeping some people with print longer than they would if the price attraction to switching were stronger.

Share this post

A year ago — even six months ago — it seemed like Amazon and its Kindle device had an insurmountable advantage in the ebook device and platform competition. Despite our admonition that Amazon’s dominance of ebooks was much more fragile than their dominance in online print bookselling, even we were impressed and sometimes daunted by the enormous percentage of ebook sales that were being made through the Kindle ecosystem.

Then Barnes & Noble introduced the Nook through their 700 stores last December and Apple brought the iPad to market in April. Nearly overnight, it seems, Amazon has gone from the dominant player to the leading player with a share that was often in the 80s for many titles having fallen to the 50s.

Three entirely new ebook platforms are now poised to make their debut. Each of them has an angle, or a USP, that the others don’t and that the vendors, devices, and platforms that preceded them — notably Kindle, iBooks, Kobo, and Sony — don’t. The three new platforms are Google Editions, Blio, and Copia.

Google’s special proposition is ubiquity; Blio’s special proposition is enhanced feature sets; and Copia’s special proposition is building social networking right into the content consumption platform.

The new entrant that is subject to the greatest anticipation, of course, is Google Editions. Whenever they go live (which they say they “hope” will be sometime this summer, which has another 6 weeks or so to run), they are likely to be offering the largest selection of ebooks from any single source. Google has a staggering number — millions — of public domain books but they will also have professional and scientific books not published on most of the prior ebook platforms. Their well-promoted proposition is their cloud model, which will allow their ebooks to be read on any device that can support a browser.

Google is also offering a wholesaling service to enable any bookstore or any web site to sell their ebooks. (What that means, of course, is that their “largest single source” claim could be usurped by their own resellers, who might have added other titles from other places.) Their arrival adds another option for potential ebook sellers who had previously been served by Ingram’s wholesaling operation or their competitor, Content Reserve, which has also reached the book trade through Baker & Taylor.

Google is working the OEM channel as well and not limiting themselves to Android-powered devices in doing so. They’ll have apps available in multiple marketplaces, including Apple. And they are offering to power sales on publishers’ own sites. We’ve seen no announcement of publishers who have accepted this proposition, but it would seem likely that some, particularly smaller ones, will find it attractive.

Baker & Taylor has been developing its own ebook platform, Blio, in concert with futurist Ray Kurzweil and the National Federation of the Blind. We were first shown Blio last December and were really impressed with its crisp presentation of integrated text-and-pictures pages. They showed us a tool kit that made it pretty easy for publishers to enhance their print books for electronic delivery with sound and video, and even to fiddle with the design in the Blio platform. Because of Blio’s roots as a tool to bring reading to the sight-impaired, the ability to adjust font sizes, a capability which all ebooks offer, had to be integrated into their delivery of complex page layouts.

We have been expecting Blio’s debut in the market for some time, and we’ve been expecting to see many highly-illustrated books, like college texts, that have not previously been in the offerings of Kindle, Nook, and Kobo. Highly illustrated books would work fine on the iPad, of course, but they were not a priority for initial inclusion for iBooks (the dedicated Apple ebookstore) and they were not what publishers would put into the eink-reader platforms that didn’t handle that material well.

Blio has announced that it will power the store Toshiba is creating to support its tablet release. Since that is expected in the next month or so, Toshiba’s offering of Blio titles will probably be their debut in the marketplace.

The tool set for Blio was what really captivated us when we saw it last December. When we saw it at the time, Blio was delivering a Blio-ready ebook from the publishers’ print PDF, and then, within Blio, the publisher could enhance the ebook. At the Untethered conference in June, Blio announced a partnership with Quark by which Blio files could be created directly from Quark. Blio says they expect the Quark release to be in beta later this Fall. Blio plans to integrate its tools into other creation software in the months to follow.

Blio introduces another format into the ebook world: rather than epub or PDF, they are using Microsoft’s XPS platform. Right now, Blio itself is handling the conversion of titles from either PDF or epub into XPS, but the Quark arrangement and the others that will take place will allow publishers to deliver XPS-ready files to Blio, cutting past the conversion queue that now exists.

The open questions have been: when will Blio arrive and what will be the retailing environment for it when it arrives? They say they have 200,000 titles committed to their platform. (They can’t just pick up the ebooks of others; they’re not vanilla epub.) The Toshiba store won’t contain them all because titles are coming in faster than the conversion process can ramp up. Blio, like Google and Copia, expects lots of OEM installation. They project that Blio could be on more than 50 million devices by the end of 2011 and that they will be working with “traditional retail partners” in 2011 as well.

Copia made a splash last week when they announced their line of ereaders, including a larger-than-a-phone-screen color model which will be $99 when it comes out in September. Since Copia is a creation of DMC, and DMC is historically a hardware company, using their own hardware to launch the platform makes great sense. But OEM relationships, and an ability to deliver their platform to any device through client apps as well as through web browsers, are part of the strategy too.

The Copia platform’s unique proposition is that they combine social networking right into the platform in which content purchasing and consumption take place. Amazon’s announcement of an integration with Facebook moves them in a similar direction, but Copia would seem to be going much further than Amazon: enabling the sharing of the content consumption experience itself among friends or a personal network. This could be critical for reading groups, areas of common (vertical) interest, or for educational applications. Inside the Copia network, users can readily share their notes and annotations. And to make it easy for people to get started on their platform, Copia enables the import of existing contacts from Facebook, Twitter, and LinkedIn.

Other ebook platforms have demonstrated the power of syncing the reading experience across platforms; you can pick up your book on one device and it will tell you where you left off on the last device. Copia takes that a step further, syncing the social experience, including the sharing of notes and recommendations as well as the reading itself, across all the devices you want: smartphones, tablets, computers, or ereaders. We saw this demonstrated on their forthcoming iPad app.

What also impressed us about the last Copia demo we saw is that they have apparently licked the problem of allowing an epub file using Adobe DRM to move painlessly into their platform, regardless of from what ebook store it was purchased.

In addition to the hardware plans they revealed last week, Copia has also announced that they will be a launch partner for Windows Phone 7, the mobile operating system Microsoft is putting forth to compete with iPhone and Android. [Maybe we know a bit more about Copia than others do because they are our client, but like all the players in this very competitive market, they're not tipping their cards before they play their hand any more than their competitors. Even to us.]

All three of these operating systems come from substantial players. Blio is being delivered by one of the two book wholesalers in America with true national and international reach and relationships with every publisher in the country. Copia is being delivered by a company with long hardware development experience and a long history of partnership with consumer electronics retailers and phone companies. And Google Editions, of course, is coming from a tech company that has had deep involvement with virtually every book publisher in the world as it has developed Google Book Search over the last seven years.

Of all the current players, Sony would seem to be the most challenged. They have the weakest device, the weakest store, and the weakest strategic position with the industry and with the public. All of the rest either have something important and unique for the developing ebook marketplace and, in many cases, they also have an outside proposition that will keep them in the ebook game regardless of how well they do in it. Whether Google’s ebooks sell 10% of their projections or 10 times their projections, they won’t be going away. Same with Apple. Same with Amazon. So I think we can expect a multi-player ebook market, with some incompatible formats and a lot of incompatible DRM for some years to come. And the players currently in the game can expect their sales to go up but their market share to go down when the three new entrants join the fray this fall. That much seems certain, but very little else does.

Share this post

The very nice people of Tata Consulting Services entertained a group of publishing executives at Yankee Stadium on Friday night in a luxury box behind first base. This was an ideal way to see an historic evening at the ballpark on a very hot night (the box is air conditioned and opening the big window in it actually leaked cold air on the two rows of great seats below) but it also gave rise to some very stimulating conversation with some smart and knowledgable publishers.

Because this was a private evening (and because this is not a muckraking blog; we traffic in insight here, not news), nobody gets identified and no quotes are attributed. But that doesn’t mean that very interesting observations about where publishing is and where it is going have to be kept secret.

There were a variety of publishers and industry leaders in the group. One of the most interesting between-innings conversations picked up from the post on this blog last week about the threat that the rapid uptake of ereading poses to brick-and-mortar stores.

One big publisher observed that he saw clearly that display in bookstores moved the needle on ebook sales. His fear, and a thought we didn’t cover in the post, is that the decline in brick-and-mortar exposure will lead to a decline in the overall sales for many titles. The several of us involved who were in this dialogue agreed that brick-and-mortar simply presented more opportunities to grab impulse sales; you can’t “promote” as many titles in the real estate available on a screen than you can in a well-merchandised physical surrounding. The online advantage is targeting, of course; the store can’t customize its impulse presentations to each individual customer, and that opportunity exists online. But except for the opening screen, we couldn’t think of any online retailer that really takes advantage of that.

Another big publisher  wondered if there might be a plateau point below which the print book erosion won’t go. “Will it level off at 50-50, say, or maybe at 70-30?” It does seem intuitively correct that there’s a hard core of paper book readers that could keep print alive.

But, of course, keeping print alive for any number of people is only half the equation for bookstores. Print can be bought online. In our post on the threat to brick-and-mortar, we posited a 2/3 drop in store sales from current levels will have occurred when we reach 50% ebooks and 50% of the print being sold online. There is a vicious cycle at work here: fewer store purchases lead to fewer stores, which will further fuel online purchasing for those readers who don’t want to give up print. And that still leaves a big problem for the remaining stores.

One publisher had some interesting observations about “ebook first” publishing, a term I think we’re going to hear more and more. To me, “ebook first” means two things. First, it means that the ebook is the primary product being considered as the project is put together. And second it means that the ebook hits the market before the print book. That second point is tactical and practical, not strategic. It takes time to print and bind and ship books, so the presumption is that, when the book development is completed, it is just faster to get the ebook into the marketplace. That wouldn’t be true if you had a “print book first” workflow and had to then do an ebook conversion from your print PDF, but “ebook first”, ending up with an XML document that will deliver all your formats, should eliminate the need to do that.

But a publisher in our group at the game who is working with a blog on publishing reported “it ain’t necessarily so.” The final QA steps with an ebook, particularly if there is any complexity at all to the design or layout, can take longer than delivering the print from the PDF. That’s not theory; that’s this publisher’s actual experience. There is nearly 100% certainty that the PDF will print what you want when you deliver it. But the epub file you deliver might not give you what you want through every ebook delivery system and for every display environment without some further tweaking.

One conversation that made me really want to learn more was a discussion of what big publishers do to prepare for the erosion of brick-and-mortar. Executives from two big trade houses agreed with the point we’ve made here that harvesting consumer names is a key. If most of the market is available online and can be reached without deploying a large-scale organization, publishers will need to raise the switching costs for major authors beyond the cash flow shuffle that the author would suffer if they lost their advance. At the game, I heard two major houses agreeing that emailable names that the house owns will be a key author retention tool going forward; one wonders if there is a sophisticated consumer name gathering and managing process taking place in the big houses that is beneath the radar; or, at least, beneath my radar! Of course, getting into the details of “what exactly do you do” would not have been an appropriate question with a curious competitor listening in so it will have to wait for some other time.

Thinking about the Digital Book World Conference program I’m planning for January, though, this seems like a really important topic. And it also seems like one agents ought to know a lot about. Gathering the names of an author’s fans is a place for publishers and agents both to cooperate and to look for a negotiating advantage. It is very tricky ground.

Several of us also had a bit of conversation about Google and Apple as retailers. One of the publishers expressed skepticism about how well Google Editions would sell ebooks. “Google has never sold things successfully,” he said. I pointed out that “never” for Google was not a very long time; the company is barely more than a decade old. But it is true that whether Google sells three times as many ebooks as they expect or one-third as many, it won’t move the needle for them financially. (More than 95% of Google’s revenue is from advertising.) The same is true of Apple, which seems to put only the most minimal effort into merchandising at the iBooks store.

One TCS executive, with a strong background in the telecom industry, was pretty sure the publishers are underestimating the speed with which the online component of their business will grow. He says the coming G4 installations — the next generation of cell phone signal technology — will mean a four-fold increase in bandwidth and speed. The new “free wifi” offer from Starbucks is a leading indicator, he said. Free wifi will be just about everywhere very soon.

I had been thinking that the only significant advantage of an app store app on the iPhone versus a web-based app was that the “true” app would hold content resident in the phone that would require connectivity to be delivered through the web. But that’s a distinction without much of a difference if wifi is ubiquitously available (or if the app itself has to access an online database to be effective.) And delivering a web app steers clear of the whole Apple approval and vetting process and is, at least today, a lot cheaper to develop. The new Google Android app tool kit apparently presents another cheaper alternative to deliver value than delivering through the Apple app framework. TCS has been responsible for a large number of the apps developed for the iPad but, nonetheless, my new friend from TCS agreed with my observation. “When do apps make commercial sense” is another topic we’ll have to explore at Digital Book World.

As a serious fan, I can assure you that my involvement in all these conversations was between pitches and between innings. There was a helluva ballgame going on. The evening began with tributes to Yankee owner George Steinbrenner and longtime public address announcer Bob Sheppard, both of whom died in the past week. The Yankees’ new primary rival, the Tampa Bay Rays, took an early 3-0 lead, but the Yanks came back with a couple of home runs in the 6th inning to tie the game. The Rays broke the tie in the 7th but the Yankees answered with another solo homer in the 8th. After the greatest player of the Steinbrenner era, relief pitcher Mariano Rivera, preserved the tie in the top of the 9th, the Yankees won in the bottom half on a 2-out single by Nick Swisher. The TCS box exploded with cheers along with the rest of the Stadium. It was a perfect night at the ballpark.

Share this post

A busy day today, but time for some very quick and simple math.

The IDPF’s figures for January show nearly a 4-fold increase in ebook sales over the prior January. Recent reports suggests that ebook sales are now in the 3%+ range for some big publishers.  But that’s a bit of an understatement of reality because so many books haven’t been ebookable (illustrated) and the backlist has been introduced gradually over time (which accounts for part of the increase.) Sales of ebook editions of new straight text titles are higher with 5% more like a minimum expectation than an average.

Meanwhile, we know this year we’ll be adding our new client Copia (with six devices and a platform that works on just about everything else except Kindle), B&T’s Blio, the iStore and Apple iPad, the Google Editions program, and a host of other new devices as well as expected next generation readers (with color, perhaps) from Kindle and Nook. Those new ebook platforms will keep the title increase going because they include an ability to deliver a more robust presentation on a larger screen.

So would we expect the pace of ebook adoption to slow down in the next 12 months from what it has been over the last 12 months? I wouldn’t, and there won’t be a slowdown until ebooks hit some new point of resistance by penetrating the market to the point of saturation. Where would that be? Your guess is as good as mine.

It is worth pondering that if the rate of growth remains about the same (let’s call it 3.5 times growth annually to be conservative about where it stands now) for the next 12 months, then the ebook minimum expectation by next Christmas would be between 15 and 20 percent of the sales of a new title. And then it can’t really continue the same growth rate the following year because that would take us to a great majority of books read being ebooks. And I don’t think you’ll find anybody expecting 60% or more ebook penetration in two years.

So my hunch is that growth will continue to accelerate for a while longer and then it will have to start slowing down. But my guess (which is as good as yours!) is that it won’t start slowing down until ebook sales are 20-25% of what a publisher expects on a new title. I’d take the bet that we reach that level before Obama’s re-election in November, 2012. Given the historical trend line, that’s a very conservative prediction, although, as I write it, it seems like I’m going way out on a limb.

What does 20-25% ebook sales fewer than 30 months from now mean if it happens? A lot of disruption.

Share this post

I really enjoyed listening to David Young and Maja Thomas, Hachette’s Chairman/CEO and top digital strategist, respectively, chat with industry veteran and blogger Charlotte Abbott on Blogtalk radio. All three are friends and people for whom I have a lot of respect. I generally prefer reading to listening as a way to take in information, but this was a crisp and informative conversation that is engaging from start to finish. I recommend it.

Some of what they said triggered some thoughts and observations.

Abbott observed that ebook sales are now reported as 3% of Hachette’s sales. All parties agreed that there are factors in place that should accelerate that growth, particularly new devices coming online bringing with them the ability to move ebooks beyond straight text to include juveniles, photo books, and how-tos that have heretofore been left out of the conversation. There was a brief acknowledgment that some observers expect ebook sales to triple in 2010 (data was cited to suggest that Hachette’s December over December ebook sales did much more than that). That could take ebooks to 10% of the business in 2010 and into the high 20s in 2011, unless it slows down.

What would make it slow down? What would the business look like if ebook sales were in the mid-20s before Obama runs for reelection? Neither of those questions were touched. Perhaps that’s just as well; it might have taken the whole show if they were.

Abbott challenged the contention by Young and Thomas that the agency model, by which discounting of ebooks would, effectively, be stopped (or extremely curtailed) would result in lots more ebook retailers on the web. Abbott may share my skepticism that there is much of a place for ebook vending for independents and, although I wrote about this before the agency model was introduced, I still think it is true.

But Thomas expressed a lot of confidence that new white label solutions for independents, combined with level pricing, will result in a much greater proliferation of purchase points on the web, and she thinks we’ll see that this year. While I do agree that price equality will enable much more diversity in points of availability, I think it will be monopolized by platforms. They will continue to include Amazon, B&N, the iPhone App Store, and Kobo (from the big retailers and Apple) for sure, as well as the new Apple iStore, Google Editions, and the platforms from Blio (from Baker & Taylor) and our current client Copia (an upstart, but an extremely well-funded upstart with six ereading devices and ubiquitous OEM relationships with major hardware manufacturers giving them a tenable foundation). All these will be around for quite a while. Considering that for the past couple of years, 80 or 90 percent of consumer ebook sales have been driven by Kindle, that’s great marketplace diversity by comparison. And independents can sell Google Editions and, possibly, Blio. But only time will tell if Thomas’s optimism or Abbott’s skepticism (and mine) will be borne out.

Abbott’s questions about the ebook backlist elicited some very useful new information. Young and Thomas explained that just about all of the straight text backlist at Hachette is now available as “straight” ebooks. There has been the impression promulgated by readers, and reported by Abbott, that a lot of backlist from big houses is not available. Not true from Hachette, they say. Young says there are only “a handful of authors” whose contracts were unclear enough to require further negotiation and he admits there it does rarely happen that an author who didn’t previously grant those rights just doesn’t want to be in that format. “In that case, their wishes must be respected.”

Thomas said that the iPublish experiment — a failed attempt by the Group (then the TimeWarner Book Group, some years before the Hachette acquisition) to create a digital-first publishing company — provoked them to change their boilerplate before other publishers did. That reduced the number of problems they had when they wanted to go to ebooks.

Good point, I thought. And it shows the benefits of early digital awareness, even if the overall iPublish effort failed.

Thomas also suggested that we might see quite a few experiments in enhanced ebooks coming from the house in the next few months. She said they were looking first to the authors they considered their “digital pioneers” to do the enhanced projects. But when asked to name them, she gave us pretty much a who’s who of the top of the Hachette list: Meyer, Patterson, Baldacci, Connelly, Meltzer. Thomas also made the point that they look at books to see what would work “in enhanced form or app form; they’re different.” That’s a distinction we’re all going to get to understand better in the weeks to come.

Both Young and Thomas made it clear that the enhanced ebook creation was still in its experimental stage. Young emphasized the fact that “we hear from our readers” as he noted was not possible previously in the history of publishing. It was the reader reaction, Young declared, that would tell them what was working and what wasn’t with the ebook enhancement experiments. The topic that this introduces which must be followed up on another time is, “how do big trade publishers make the best use of the direct consumer contact they get in the digital age?”

For me, the most poignant moments came at the end. Abbott asked an open-ended question about the industry’s future, and Young launched into an entirely true but painfully ironic tribute to the virtues of the brick-and-mortar bookstore. He said his biggest concern was that “we need bookshops, which are the heart of supporting new writers. We need these showcases and professional and enthused booksellers” to help people find what they didn’t know they’d want. Recent industry data from Bowker PubTrack underscores the point that many book purchasing decisions are made in retail stores or because of the merchandising that took place in retail stores.

Unfortunately, retail stores are increasingly threatened. They have been disappearing pretty steadily for about 10 years now with the pressure created by online and used book sales, with only minimal erosion (thus far) due to ebooks. This conversation made it clear that ebook growth will continue to be substantial and that bookstores are critical. Both are right. But the combination of the two is more than most of the big players can comfortably wrap their brains around. And it is the skill in navigating the continuing erosion of retail shelf space that is going to separate the survivors from the roadkill over the next few years.

Dominique Raccah of Sourcebooks gave a presentation about “running two companies” (the one in the old business and the one creating the new business) at TOC which I was sorry to miss. (I can’t remember what I thought was more important at that moment.) However, Book Business magazine has an article by James Sturdivant on that same topic which quotes me heavily. Are you surprised that I agree with a lot of it? (I hope Dominique does too.)

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