Madeline McIntosh

The American Booksellers Association held their seventh annual “Winter Institute” in New Orleans this year, and it took place last week. When I had a meeting at Frankfurt in October with the ABA’s Chief Executive Officer, Oren Teicher, to recruit him to speak at Digital Book World 2012 (which he will do this coming week), he urged me to attend so I could get a taste of the optimism and innovative spirit of the independent booksellers who gather to share best practices and learn more, largely from each other, about how to run successful stores.

(Actually, Skip Prichard of Ingram captured this “learning from each other” zeitgeist beautifully in his opening remarks when he stopped talking and told the attendees, seated at round tables in the ballroom in front of him, to tell each other the most important new thing they had done in the past year. The room buzzed with activity for a few minutes and then Skip resumed his talk, confident that everybody in his audience had learned something during his time on the stage. It was an artful moment.)

I attended about half of the 3-day show and it is easy to see why a number of publishers are so enthusiastic about it. The publishers and other hangers-on (press and observers like me) are hardly noticeable in a sea of booksellers. And, indeed, this year (at least), they were a very optimistic bunch. The anecdotal impression was of many stores who had great years. Some attributed this to the demise of Borders but others thought there had to be another explanation because the closest Borders to them was too far away to be responsible.

There is data and anecdata that suggest that we’ll look back on 2011 as a year when the hockey-stick-like ebook growth slowed. (“Plateaued” would be too strong a word.) We may learn that even the Christmas devices-as-gifts effect on ebook sales wasn’t as strong this year as in years past because many of the “new” devices are actually “replacements”, which won’t spark the same sort of pipeline-filling buying spree that is apparently set off when people get their first ereader. Combined with Borders closing and the closing of other indies, this could have brought national store inventory more in line with more-slowly-reducing print book purchases in stores by consumers.

Anyhow, the vibe at WI7 was great. And so was the program. What I enjoyed most was bestselling author and fledgling Nashville bookseller Ann Patchett, who claims she not only doesn’t read ebooks or write a blog; she claims never to have even read a blog! (I was wondering if she does email.) But she talked about her experiences encouraging booksellers to handsell her work and the joy she gets from handselling the books she loves. Her talk was inspirational and witty and charming. Even though the only “practical” suggestion (not a bad one) was that stores find a local author to be part of their ownership-management (they do attract press coverage, as Ann pointed out), it was a highlight for most of the people there.

But there were two other sessions, which opened my eyes in one case and turned my thinking around in another, that delivered the most compelling additional insights for me.

Matt Sutko of ABA moderated a session of booksellers talking about their experiences selling ebooks. He delivered data before the panel discussion (ABA has visibility into the activity on many member web sites and can present an aggregate picture) and one particular element really caught my attention. This is the one that opened my eyes.

What I found startling were two things in juxtaposition. Matt reported that the percentage of ebook sales to total sales on ABA member web sites rose from 0.7% to 5.2% in 2011. That’s a 750% increase, which is impressive even though the Google eBook capability kicked in during that year. But it is also actually understated, because the total volume of business on these sites rose by 82%. So the share increase of 750% is in an environment where total sales nearly doubled.

(I only wish that Matt had given us a breakdown of the same data by half-year, so we could see the growth within Google’s first year. I think ABA would benefit going forward by tracking and reporting those stats by quarter.)

There is good reason to believe that kind of dramatic share growth can continue into the future. Many stores just got started with their ebook program (Chris Morrow of Northshire, one of the most successful and innovative indies in the country, told me he only started selling ebooks in December! He’s not alone.) And store after store reported steady efforts educating their staff, educating their customers, making things clearer on their web site, and learning how to be good merchants online as they are in their shops. (They also pointed to improvements in the infrastructure being made by Google at their request.) All of these things take time. But they also improve the customer experience and increase sales.

Many people acknowledge that Barnes & Noble performed a bit of a miracle with the Nook, moving to a strong second-place position in ebook sales in a year. But B&N is a chain; their booksellers are paid staff and their learning is all aggregated and reflected on one centrally-controlled web site. The ABA membership, somewhat fewer stores and less shelf space to begin with and without a highly-visible device to anchor their efforts, moves more slowly and with less cohesion into the digital age. But they’re moving and they’re making progress. And they have loyal customers who want to shop with them if they can.

So I personally will postpone writing off Google ebooks or the possibility that indies can be important ebook vendors until we see at least one more year of data.

The thing I got turned around on was World Book Night.

World Book Night, which will take place on Monday, April 23, is an “event” in which it is envisaged that about 20,000 people in the US will each give away 50 books to total strangers, for a total of 1 million books passed from human to human in one book-awareness-raising night. It was first done in the UK and was deemed a success: the books chosen for giveaways spiked in sales and the participating stores and publishers all seemed to think it gave the business a shot in the arm.

I first heard about this from a presentation by Madeline McIntosh of Random House at the BISG annual meeting last September. Certainly no fault of Madeline’s, but I just didn’t “get it” the first time. Twenty thousand people to give away books? Where are they going to find them? How much distracting effort is this going to take? The “harumph” in my brain overwhelmed my imagination, I guess.

But as Carl Lennertz, who quit his job with HarperCollins to head up the World Book Night effort, explained what had taken place and what would, imagination picked up the idea. (Maybe the “harumph” piece was rendered inactive by the overall vibe of WI7.) He described an effort that has already gotten contributions of paper and printing for the giveaway books, aggregating and reshipping (by Ingram) to the contact points, as well as permissions from publishers and authors to include the books and waive royalties. B&N is in. Libraries are in. Everybody is in!

But it was actually Oren Teicher’s appeal to the stores to get involved that brought back lessons of my youth to see the real virtue in World Book Night.

My first post-college “real” job was putting together the McGovern campaign in upstate New York in 1971 and 1972. We saw various hurdles we needed to jump — winning over delegates to the annual state convention of reform Democrats, holding a delegate nominating caucus in each congressional district, getting petitions signed to put the delegate candidates on the ballot, and then components of the primary campaign itself — as a series of discrete “organizing opportunities”. When you have a “cause” and you need help with a specific and comprehensible task, it brings out volunteers who will ask you to tell them what to do.

And that’s what World Book Night presents local stores: an enormous “organizing opportunity”. They get to galvanize their customers around their mutual love of books, enlisting them to participate in spreading the joy of reading. That strengthens the bonds to particular people and to the community at large. They get to take these efforts to the local media and give them a local spin and generate more conversation around these books and books in general. And that is something, as Oren pointed out, that 500 independent bookstores can do better than 500 Barnes & Nobles!

The collective effort of many individuals can have a galvanizing national impact, as we saw two years ago with the Tea Party and over the past few months with the Occupy movements. I’m not promising to stand on the corner of 2nd Avenue and 51st Street and hand out books next April 23, but I’m sure way past believing it is a waste of time to find 20,000 people who will do the equivalent in their neighborhood.

[Subsequent to posting this, I got a note from Jamie Byng of Canongate in the UK, whose idea this whole effort was. It's clear in that note that WBN is looking for 50,000 US volunteers to give books away, not 20,000 as I mistakenly reported here. I believe the target of 1 million total books as reported here is still correct.]

In addition to Oren Teicher speaking from the main stage at Digital Book World this week about indie booskeller data from last Christmas, the growth of the ebook program, and the business model experiments being conducted by various indies with different publishers, we’ll have a panel of indies discussing new business model approaches in a breakout session moderated by John Mutter of Shelf-Awareness. I hope to see lots of you at Digital Book World or at our kickoff Publishers Launch Conference on childrens books on Monday, also at the Sheraton. If you’re a reader of The Shatzkin Files and you see me, please say hello.

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I find myself with a lot of pages open on my web browser. Even before Amazon’s announcement yesterday about ebooks passing hardcovers in sales this past quarter, there has been a lot going on.

There had been some suggestions, which I never bought into, that ebook sales were slowing in 2009. (Is this a meme that started with somebody anti-Agency? More on that later…) I look at the IDPF chart as it stands today and it is headlined 2010 Sales  ”OFF THE CHART” vs. Previous Quarters and that’s how it looks to me. A major publisher told me yesterday that AAP figures suggest ebook sales are up 210% this year and that house’s numbers are up 225%, so they feel they’re rising with the tide. That’s about what PW said the AAP said with the additional information that hardcover sales were up and paperback sales, trade and mass market, were down.

In fact, Amazon, in the face of the apparently-stiff competition from the Nook and the iPad, says Kindle book sales have tripled in the first half of the year!

Nonetheless, Madeline McIntosh at Random House doesn’t see ebooks causing problems for paperback sales. She’s quoted in the Wall Street Journal saying, “Our conclusion is that there’s no data to prove any connection—good or bad—between growth in e-books and the growth or decline, in trade paperback sales. … If anything, we may be seeing a positive effect in which the steady pace of e-book sales helps to keep a book in front-of-mind for a growing number of consumers after hardcover momentum slows.”

Kat Meyer, blogging for O’Reilly, got an indie ebookseller to talk on the record about the difficulties they’re having with the transition to Agency. This would seem to undercut the idea (which I agree with) that Agency is good for smaller sellers, because the little guys will get squashed in a price war with big guys. A seminal figure in the online book retailing world who has worked with smaller stores on these challenges for years told me in a phone conversation this week that he completely agrees with me. But the problems Kat lays out for the smaller guys during the transition are real. Let’s hope we don’t lose too many of them while this all gets figured out.

Meanwhile, Knopf made some news with the announcement that they are converting more of their backlist to ebooks. We were wondering what titles they could have missed so far. Random House has never been a laggard at ebook conversion and we’re scratching our heads wondering about a conversion initiative that would be imprint-specific. But this shows that the ebook sales records being broken are occurring without the gun being fully loaded; they’re still making ebullets out of old books.

Joe Wikert wrote a blog about the emerging ebook landscape in which he imagines that the various indies selling Google Editions will, all together, constitute a big Amazon. I don’t think so. I don’t think Google can save indies with what they’re doing. But it is good that they’re trying.

Joe also thinks that Amazon will abandon the Kindle device in favor of the Kindle as a platform. I don’t agree with that either. The device is reportedly still selling like hotcakes with sales rising quickly since a recent price cut, even while the Nook has established itself and iPad has been “competing.” I think there’s room for tablet computers and ereaders, which might be a minority position at the moment. (Being in the minority is perfectly comfortable for me.)

You know we’re all about vertical here at The Shatzkin Files. It looks like some authors from big houses are taking this vertical thing into their own hands. A bunch of gardening authors have created their own garden experts speakers bureau.  It won’t surprise anybody if I predict that this effort will be more successful than the “horizontal” speakers bureaus launched by some of the major houses over the past few years. I checked with the folks at Cool Springs Press, the gardening publisher I featured here a couple of weeks ago, and, of course, they’re involved.

I had written a blogpost recently saying that I thought ebook selling nodes would explode and be all over the web. It looks like Oprah is fueling that idea in a way that I hadn’t entertained: with an app. Why not? Who has a better brand than Oprah for “curation”? Maybe Barnes & Noble. But maybe not.

It also seems that self-publishing is growing in ubiquity and respectability. PW announced the plans of an author who told his agent not to bother selling his rights. If this isn’t the major trade houses’ worse nightmare, it should be! Joe Konrath, who may go down in history as the trailblazer who proved that some authors, at least, can make money without publishers, is reporting his rising Amazon revenues on books the New York houses have turned down, and they’re eye-catching.

And the last thing I note in this pot-pourri is the news from Farrar Straus & Giroux that they’re launching an online literary magazine. On the one hand, this is the kind of niche marketing we’ve been advocating that larger houses pursue. On the other hand, the story suggests this is all about promoting FS&G books, not about building a community of like-minded readers, few of whom would know or care which publisher put out the last book they liked.

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We had a very successful debut annual conference for Digital Book World last January, even though we didn’t conceive the idea until June, put together a group of helpers (which we now call our Conference Council) until July, or draft the initial program until August. This year we’re way ahead of that schedule. We’ve put together a fabulous Council to advise us this year and we’re having a meeting of many of them next week to discuss the agenda and to start getting suggestions for speakers.

The Council gives us wide exposure and connections to the trade publishing industry. That way we make sure we don’t miss any ideas and we don’t miss knowing about any talented people whom our audience would want to hear.

We have several publishing company presidents and CEOs (Sara Domville of F+W, Marcus Leaver of Sterling, Maureen McMahon of Kaplan, Brian Napack of Macmillan, Dominique Raccah of Sourcebooks) and some presidents and CEOs from other companies and support organizations in the industry (Kristen McLean of the Association of Booksellers for Children, Tracey Armstrong of Copyright Clearance Center, Peter Clifton of Filedby, David Cully of Baker & Taylor, Joe Esposito of GiantChair, John Ingram of Ingram Content Companies, Scott Lubeck of The Book Industry Study Group, and Steve Potash of Overdrive Systems.)

We have other senior level executives, many with specific digital responsibilities (Peter Balis of Wiley, Ken Brooks of Cengage, Mark Gompertz of Simon & Schuster, Madeline McIntosh of Random House, Thomas Minkus of the Frankfurt Book Fair, Larry Norton of Borders, Kate Rados of F+W Media, Charlie Redmayne of HarperCollins, Adam Salomone of Harvard Common Press, John Schline of Penguin, Evan Schnittman of Oxford University Press, Michael Tamblyn of Kobo, Maja Thomas of Hachette, and Tom Turvey of Google.)

We have agents (Sloan Harris of ICM, Simon Lipskar of Writer’s House, and Scott Waxman of the Waxman Agency) and industry consultants and commentators (Michael Cairns of Persona Non Data, Ted Hill of THA Consulting, and Lorraine Shanley of Market Partners International.) And because he is our media partner, we have help from Michael Cader of Publishers Marketplace as well. And we also get great input from others on the F+W team: David Nussbaum, David Blansfield, Cory Smith, Guy Gonzalez, and Matt Mullin.

So we have all the Big Six represented, as well as small publishers, industry-wide associations and service providers, wholesalers, digital distribution partners, retailers, and agents. All of these people have real input into the topic list and speakers. Many of them are joining us for a meeting next week to review our ideas for the program, which we previewed on this blog about a month ago.

Because Digital Book World tries to be at the cutting edge of trade publishing and digital change, we often face one or both of two challenges. Sometimes we believe something should be happening, or be about to happen, but we may not know where or whether the publishers leading the charge will talk about it. Several topics come to mind that fit that description: vertical efforts inside general trade houses; what houses are doing to adjust to reduced expectations for print sales in bookstores; how houses are gearing up or changing their sales efforts to compete in and serve a growing list of digital intermediaries; how enhanced ebook and ebook first creation change the traditional order of things in product development.

The other challenge we have to work around is when people can say things privately but not publicly. One topic that is very tough to talk about is ebook royalties, which is a major point of contention between publishers and leading agents at the moment. The big houses are pretty adamantly trying to hold the line (publicly) at a royalty of 25% of net receipts. But upstart publishers like Jane Friedman’s Open Road appear to be willing to pay 50%; publishing through Smashwords yields 85% (but sells the books without DRM, which would frequently scare the copyright owners of valuable properties); and self-publishing through a distributor would deliver a yield somewhere in between. (Remember: self-publishing ebooks carries no inventory risk.) In that environment, some agents are able to wring some concessions from some publishers. But the agent can’t talk about that without jeopardizing her ability to get concessions for her clients and no publisher will volunteer to reveal the isolated concession and start turning that into a policy.

Some things are just hard to discuss. Do booksellers, or even the publishers and wholesalers who supply them, want to talk about the possibility of their impending demise? But how can one plan for the future and ignore that elephant in the room? If a publisher suddenly sees the necessity of developing direct selling relationships with end users, after years of telling booksellers he was against it, does that publisher want to talk about those efforts in public?

When competitors participate in industry education initiatives, they must draw lines around what they will reveal and what they won’t. One ebook-responsible executive we know at a major house is persistently reluctant to reveal what he’s doing or what he’s thinking. But he has a boss, one who is proud of what he does and what their house does, who pushes him forward as a speaker.

Frankly, I think these challenges are greater for us than they are for other conferences on digital change that focus more on technology than they do on business practices. Very few publishers are masters of tech; usually they’re working with outside suppliers who are happy to share best practices. But business practices are different; they’re more sensitive. Sometimes the reluctance to share them is sound. Sometimes constraints are even legally required. Since our job is to focus on business practices, we’re glad to have relationships with very knowledgable players who will candidly engage with us on these challenges so we can figure out the best way to protect true proprietary knowledge but still disseminate valuable information.

We’re really proud of the illustrious group we have gotten to advise our efforts, and we get great value from them even though their first responsibility is to the company they work for. We feel confident that this group helps us cast a net that is wide and broad enough to assure us that any major development in the trade book world will hit our radar screen and that we’ll know if there are informed people willing to talk about it.

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