Kassia Kroszer

Here’s a quick review of the iPad. I’ve had it for a few days now and, based on what I know so far, it isn’t going to be a very important part of my life. It has great capabilities, but it has real limitations. The capsule summary is “not as good for straight text ereading as a Kindle; fabulous for visual stuff like movies and pictures and games (which I don’t play) but limited there by not supporting Flash.”

So far, I’ve watched a movie (using the Netflix app here might be the biggest payoff here for me with it, but I’m usually not big on movies out of theaters), gotten books from three platforms (Kindle, Kobo, and, of course, the iBook store), grabbed the Elements book-app (cool…). I also got a Vook (Dr. Jekyll and Mr. Hyde), which was enough for me to see “not my cup of tea.” Maybe others on other subjects will be different…better. This one was both just not appealing (a clip introducing John Barrymore embedded in the first page of the story) and defective (a bunch of links that don’t work.)

The keyboard is miles better than one on a phone, but nowhere near as good as one on a laptop or netbook. So it isn’t a substitute for carrying a full-function computer on a trip, regardless of what software they eventually build for it. And if you’re going to carry another keyboard, what have you gained over carrying a netbook?

I bought it because I needed to see it and, to tell the truth, I thought it would be cool to carry it around the London Book Fair next week and show it to a lot of people in publishing who had not seen it yet. But the damn thing weighs a pound-and-a-half and doesn’t fit in any pockets (the Kindle fits in the hip pocket of most sports jackets which, frankly, I wear regularly for the pockets!) and I’m not slinging a briefcase on my shoulder to have the iPad when the iPhone keeps me adequately connected in a conference or trade show situation. It’s worth putting in my suitcase to show friends in some situations, but it won’t be with me most of the time.

There was some fun I could have on a computer or an iPhone that was definitely better with the iPad: using the YouTube app, punching in the names of old rock stars, and watching clips. (The sound from the iPad speakers is more than passable.) And being able to show photographs on the big iPad screen will be a great benefit for some people.

But as a straight ereading device, it just doesn’t cut it for me. The extra weight (over a Kindle or an iPhone) just isn’t sufficient compensation for the extra screen capability. It isn’t as good as the iPhone for reading in bed in the dark because the much more light it throws off makes it harder to avoid annoying your significant other. It took me a while to find it, but the lock that allows you to lie on your side and have the type lie in its side with you is managed by a button on the device itself, not a setting in the ereader platform, which is how Kindle and Kobo do it on the iPhone.

And Apple has not mastered the shopping experience for books yet. The iBook store shows far too few books per category. You see “new in fiction” and you ask for “all” and you get 23 titles? Give me a break! Or you go to “history” and see “recent releases” and you ask for “all” and see 18 titles? It looks great, but this is not using the unlimited bookshelf of the web to anything near its potential.

When you search for “baseball” in the iBook store, it doesn’t tell you how many results you get, but the answer is 117, strikingly similar to Kobo.

Kobo’s shopping experience is similar. When you search for a topic (I chose “baseball”). you are told how many results are being returned to you (I got 114.) While shopping for Kindle titles requires you to go “out of app” to their store on the web, that’s not really a problem (you can hardly tell the difference.) Of course, Amazon is the champion of choice – their killer app — and there are 946 search results for baseball. That suggests to me that both Kobo and iBooks have a long way to go to catch up to Kindle’s selection of titles. That means the advantage remains with Amazon for the foreseeable future.

I had a chat today with a collaborator who is more tech-savvy than I. He said he’s hearing the “too heavy for an ereader” comment from a lot of people. He theorized that perhaps some people might get an iPad instead of a computer if all they needed a computer for was web-surfing and emailing. But he admitted a netbook might be a smarter purchase in that situation for a lot of people.

Certainly, this device is not going to put the Kindle out of business and I doubt it will be the preferred ereader for any heavy consumer of books, or what books are today.

But the good news for publishers is that Apple will sell a lot of them as “content machines”: to people who aren’t primarily book readers. We might pick up some new ebook readers from the large universe of people who hardly read books now as a result. That would expand the market to our benefit.

On the other hand, anybody interpreting the announced 750,000 ebook “downloads” (not “purchases”) to 600,000 iPad purchasers in the first weekend as promising for publishers would need more data to come to that conclusion. That number by itself isn’t impressive, but we don’t know how many Kindle or Kobo (or other) books were downloaded by new iPad owners. Only Amazon knows for sure, but I’ll bet that 600,000 Kindle owners download three times that many book files in the first 24-48 hours they have their devices and it would be a bit of an upset (to me) if initial iPad activity were heavier with non-iBook content than with books purchased directly from Apple.

So the hunch from here is that the iPad will help us grow the ebook market but the makers of lighter and cheaper e-ink devices don’t have to leave the field just yet.

I thought Kassia’s take on this was useful as well. She explores the Ibis Reader which I didn’t (it sells little or no “branded” content so it is of less interest to me.) We mostly seem to agree about the iPad and ereading except that because she’s a woman,  she’s thinking this will encourage men to carry some form of handbag. Good luck with that one…

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The tactic of keeping the ebook off the market to “protect” hardcover sales, first executed by Sourcebooks this month on behalf of Bran Hambric, is becoming more widespread. At the same time that Dan Brown’s The Lost Symbol was released simultaneously in cloth and digital, Ted Kennedy’s posthumous True Compass was released in print with the ebook withheld. Now Harper has announced that the new Sarah Palin biography will come out in cloth in November, but the ebook will be held back until the day after Christmas.

The Kennedy case is a bit different because the book contained color pictures that would not render on the most popular ebook platform (the Kindle), but in all these cases the primary motivation of the publisher seemed to be to avoid having a low-priced ebook competing with its hardcover sales.

Kassia Kroszer has written a nice little rant about the counterproductiveness of this strategy, with which on purely economic and marketing grounds, I substantially agree. She points out that there is no evidence that ebook sales come at the expense of hardcover sales (of course; there’s also no evidence that they don’t…) She also posits that the ebook reader and print reader are often different people. If that’s true (and it is a general notion I’m inclined to share), then holding back the ebook is bound to just lose sales because the title won’t be available as an ebook during “maximum buzz.”

If a publisher’s concern is that reckless ebook pricing bleeds sales away from the hardcover, there is another solution. (One that can work; I have proposed solutions that can’t work.)  The publisher could just sell the ebook exclusively at its own site and price it any way they want. It would be like the publisher download is the ebook “hardcover” (i.e. expensive) which is replaced by the ebook “paperback” (i.e. sold at retailers and priced more aggressively) with whatever timetable for that the publisher wanted.

If publishers maintain their retail prices and their discounts, then the aggressively-priced ebooks aren’t costing them any margin. In that case, they’d be making more money per unit on the ebook than on the print books. There’s a degree to which the retailers’ aggressive pricing constitutes a gift to publishers and authors, even if none of them seem to be seeing it that way.

But there are also two other elements  major publishers have to  considere when they make ebook decisions: their relationship with Amazon.com and the health — even the existence — of a brick-and-mortar retail book trade.

Amazon is the driving force behind cheap ebooks, and they’re doing it to herd more and more people into their closed market with the Kindle. That’s a perfectly reasonable objective from their point of view, but it is very threatening to everybody else in the industry, all of whom would prefer a more diversified ebook market for their own reasons. That’s part of why I think selling direct off the web site at the higher price is something you might see happen. It’s a polite way to stick a finger in Amazon’s eye.

The retail book trade is important for many reasons, but the under-appreciated one is that bookstore shelf space, at 45 to 50% discount off retail, is the cheapest marketing investment publishers can make. It sorts their books out and puts them on display (hey! sometimes even in shop windows!) in front of people who want to buy a book. There isn’t any better product placement than that. Every ebook sold weakens the trade, accelerates the reduction of opportunities to put books in front of readers in the most efficient possible way. Publishers have a real interest in preserving that asset.

Earlier today we interviewed Raelene Gorlinsky of Ellora’s Cave as part of our preparation for Digital Book World. (They will be on the program!) I was aware that Ellora’s Cave existed and vaguely aware that they were an ebook-first publisher, but, not being a romance reader I was not as clued in to them as I should have been. They’re nine years old and the company is quite a story.

I’ll save the story for another time but I want to pass along one piece of wisdom from this morning’s conversation that is relevant to this post. Ellora’s Cave publishes printed-on-demand editions of those books of theirs that they can (many are too short to be print books and are only put into print as part of anthologies.) Raelene explained to us that they generally hold the print book back for 18 months after the ebook is published (and they publish about 10 new titles a week!)

Why does Ellora’s Cave hold back the print book? Because they make more money on the ebooks, of course, even though the print books cost somewhat more! (They have to pay for that paper, presswork, and binding somehow…)

Of course, I’d tell them to just raise the price of the print book for the first 18 months rather than withhold it. They’re making a close cousin to the mistake I’m accusing the conventional publishers of. But at least they’re preserving the higher margin sale, not the lower margin one.

Sometimes being in publishing makes you feel like Alice in Wonderland.

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There’s a new publishing model afoot, which is to lead with the ebook and just print what you need. That might be POD, and it might be press runs, if you can sell out whole press runs. If the ebook becomes a substantial chunk of sales and if ebooks maintain their prices, this looks like it could be a new way to do much lower-risk publishing.

Some very smart publishing people are moving in this direction. It had been the plan of the meteoric Quartet, which has already flamed out. It is part of the plan of Richard Nash, an experienced publisher (Soft Skull Press) and a budding entrepeneur. It is the model for a young and aspiring Irish publisher named Eoin Purcell. And last week, tor.com announced that it would be publishing books (this is distinct from its “parent”, St. Martin’s sci-fi imprint Tor) with an ebook first and POD methodology.

Can no pressrun publishing work? That’s a subject for discussion at Digital Book World in January, but, based on an interesting post by Kassia Kroszer, one of the four principals in Quartet, I have real doubts.

Kassia’s post makes it clear that direct sales at “full margin” (meaning no cut to anybody else in the supply chain) were an important part of Quartet’s budget and plan. They figured that by sticking to niches, and the first one was going to be romance, they’d be able to build up a direct audience and avoid sharing revenues with retailers and wholesalers. Kassia points out that savvy ebook readers (who apparently also hate DRM, high prices, lack of interoperability, etc.) are willing to support their “local” publisher, knowing that more money gets to the author that way.

This all makes me more skeptical about the model.

Savvy ebook readers are a large part of the current readership, but they won’t stay that way. If ebooks are going to become a business, than casual and uninformed ebook readers will have to join the party. Although I’ve been reading ebooks for 10 years, I’m one of those. I don’t shop around for my ebooks; I buy from what I deem to be the most convenient source. When I used to read on a Palm (in pre-Kindle days), there was no such animal, but Peanut Press followed by Palm Digital followed by ereader had to serve. Then Amazon and Kindle changed the game. And now B&N is providing me exactly what I need for my iPhone.

If a web site I was on anyway offered me an ebook I wanted that would work in my BN reader software, I wouldn’t be reluctant to buy it. But I will only be shopping at places that offer me a choice of things I want. It’s hard to imagine a single publisher doing that.

The web constantly reminds us of the value of monopoly. Amazon has a huge advantage in being the best place to shop for books because they’re the biggest. The size of the purchasing community adds value: more reviews, more data to make better suggestions or respond better to search queries, and it gives them the scale to add unique content through Kindle and BookSurge. In the same way, we’re likely to see a dominant horizontal ebook retailer emerge.

So no matter how good you are at selling your own stuff, if you want to sell to the public at large, you’ll almost always have to use intermediaries. And if you want to sell stuff to your own niche, you’re going to have to be an aggregator, not just a creator, to offer enough product to keep even a niche audience interested. And, if that’s true, then even within the niches, most of the small creators will have to share their revenue with an intermediary.

The loyal and informed crowd of romance readers may have learned that they can find the books they want at Harlequin.com or Ellora’s Cave, but there has to be a limit to the number of individual romance publisher sites the community will support. The right move for Harlequin would be to imitate tor.com and start selling their competitors’ books. (Tor hasn’t done this for ebooks, yet, but they have done it for print.)

The idea of building a niche presence for most subjects simply through publishing in it, rather than by building a real vortal or community site, seems futile. Another lesson from the web (so far; it could change) is that making your own content and selling what you make is not a viable model, except at the very highest price points. You have to figure out how to leverage other people’s content and community participation. That’s what Google does. That’s what PublishersMarketplace does. That’s what the future successful publishers I envision in the Shift speech will have done.

Cutting costs and cutting waste, which ebook-first publishing does, would certainly seem like a path to financial viability. But it takes revenue to pay the bills. If you don’t go out and reach customers where they are — at the big Internet retailers — you need to be selling ebooks to a very large community for sales to be substantial enough to run a business. And if you do use those retailers, they (quite reasonably) extract their share of revenue for delivering access to the customers.

It may be too soon for the ebook-first model to succeed, except in niches more tightly defined than “romance” (which, indeed, is a big part of Purcell’s initial approach) or when it is supported by another business (which is, if you think about it, tor.com’s approach.)

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