StartWithXML

It looks like we’re going to have a bit of an unintended debate stretching across several of our panels at the Publishers Launch show in London. Since I’m the guy who put the show together, I can speak with authority to the fact that it was really unintended. But I consider it serendipitous and proof of Branch Rickey’s axiom that “luck is the residue of design”.

I first started probing the question of new business models for agents two years ago when I was organizing the first Digital Book World conference. I had been asked by F+W Media to create a program that would be (in their words) “more practical” than they found Tools of Change to be. I was in partnership with O’Reilly at that time working on a “StartWithXML” show to take place in London. I wasn’t really looking for a reason to compete with them; we were collaborators.

But as I thought about what they did (which I like) and what I might do, I realized that our approaches would be different and our shows would be different. In my mind, the clearest delineation of the difference was that I put agents squarely into the middle of our show planning. This move is a bit counterintuitive in the conference business since agents have never been big ticket-buyers for the industry’s digital education events. But I thought then — and events have subsequently confirmed — that agents were key actors in the digital transition. You can explore the tech challenges of digital change without them, but you can’t really think about the changing economics of trade publishing without bringing them into the conversation.

What seemed logical then — also confirmed by subsequent events — is that agents might become ebook publishers. This had actually happened a decade before, when agent Richard Curtis set up his E-Reads business at a time when most publishers just wouldn’t do ebooks for most titles, if at all. Richard had run into political problems with the agents’ association (AAR) which I believe he headed at the time. They have a code of ethics which could be interpreted to prohibit an agent-publisher such as he had become. In fact, I was a bit surprised (but definitely sensitized and enlightened) when a good friend of mine who is a successful and highly ethical agent told me she couldn’t possibly participate in a conversation that might be seen to endorse the idea of agents becoming publishers.

We put together a panel on “new models” for agents at DBW 2010. We repeated it last year (even though there’s a natural reluctance to repeat things year to year), and we surely are going to include the topic at DBW 2012 next January.

And that brings us to what is going to happen in London on June 21.

We have four prominent agents speaking on different panels on the program. At least three of them are likely to renew the conversation about whether an agent can become a publisher and still be a credible representative for an author.

One of the panels I’m most looking forward to on that day is called “An Emerging Opportunity: Selling into the US”. Charlie Campbell, an agent at Ed Victor Ltd., will participate on that one. We wanted Charlie on the panel based on a conversation we had with him a few months ago about the possibilities he saw for his office’s clients to capture sales in the US through ebooks. When Victor’s office announced the creation of a new publishing operation to handle their own authors’ books, our interest heightened. So Charlie will be explaining how that publishing operation will work and how it benefits the authors in their stable within the context of capturing US sales from a UK or Ireland base. His fellow panelists will be publishers.

Our last panel of the day has Michael Cader and me interviewing four leading luminaries of UK publishing. Three of them are publishers, but the fourth is the agent Jonny Geller of Curtis Brown. Curtis Brown is frequently rumored to be about to start an operation similar to what Victor has announced. (In the US, by the way, agent Scott Waxman — a member of the DBW Conference Council and one of the original participants in our conversations about this — has created a publishing adjunct to his business called Diversion.) Our focus in that panel was not intended to be on the ethics of agents starting publishing companies, but now I think the topic is likely to arise.

Why? Because a third agent on the program that day, Peter Cox of Redhammer, has placed it front and center with a post he published yesterday called “Your Agent Should Not Be Your Publisher”. Peter is on a panel about “Innovation in Marketing and Business Practice.” He caught our attention because he’s been training his authors in digital marketing for years and because he told us he was thinking that the agent’s model had to change to handle fewer clients for a higher-than-standard percentage of the revenue. We didn’t ask Peter at the time how he felt about agents becoming publishers.

It turns out he is very firmly against it and is very clear and articulate about why he thinks that. The moderator of that panel is Richard Mollet of the Publishers Association. I’m sure his membership will very much want him to invite Cox to expand on his ideas. Cox’s panel takes place after Campbell’s but before Geller’s. The juxtaposition of the commentary across the panels will probably be of great interest to the audience and should make for some very interesting tweeting. Maybe we’ll need a special hashtag just for #agentsaspubs!

It was the fourth agent on the program that we thought was going to have the trickiest assignment. David Miller of Rogers, Coleridge and White Ltd. will be discussing “Territorial Rights and Open Markets” with Richard Charkin and Toby Mundy. Since the future of both practices depends very largely on what agents will agree to as the publishing landscape changes, I had thought David had the most politically challenging conversation of the group. It turns out that he’s excused from what will certainly be one of the most controversial aspects of the day’s discussions, although in our very open format, everybody’s free to say pretty much what they want. Perhaps Philip Jones, the moderator of that panel, will want to touch on this question with his panel as well.

It might be that at Publishers Launch Frankfurt we’ll stage this more directly as a debate (but that’s a crowded program and it might be hard to fit it in). You can bet it will be aired thoroughly at Digital Book World next January. And you can be pretty damn sure we’ll be generating some news on this topic (and others too, I’m sure) out of “A Global View of Digital Change”. If you’re in (London) town on June 21, you ought to be there.

Share this post

One of the findings of our StartWithXML project was that book publishers can expect the market for pieces of their content and databases of their content to grow, even while the market for books themselves may not. In the context of our XML research, that is part of the reason publishers need to tag their content deeply (so they can find things) and make their content agile (so it can adjust itself to the different display requirements of different end users.)

After all, we’re in an era where web site content is needed by every entity on earth. Most of it will be unique and will need to be uniquely created. But an enormous volume of content for web sites has, and can, come from existing intellectual property.

The challenge is to create an efficient marketplace to enable that content to be found, licensed, and paid for. It can’t be the function of each individual publisher to peddle and transact for its own wares in this environment. It wouldn’t be cost-effective for the buyer or the seller.

And this brings us to Copyright Clearance Center, CCC, a not-for-profit corporation that licenses published content of all kinds for re-use by what must be the largest and most diverse collection of content purchasers served by any aggregator on the planet. We’ve gotten to know CCC this year as a client. We’ve never encountered an organization in our industry dealing with more complex challenges and it looks like CCC will be in a position to play a critical role helping publishers cash in on the new opportunities in digital licensing.

CCC was formed in 1977 by a group of content users, authors, and publishers and opened its doors on January 1, 1978, initially to enable publishers of all kinds to collect the payments legitimately due to them for internal-use copying of material, primarily by corporations and academic institutions. The number of entities licensing content from CCC is vast: over 35,000 businesses and more than 1,000 colleges and universities. Prior to CCC, the market was inefficient, costly, and fragmented and the cost of negotiating the use-by-use licenses made widespread unlicensed use inevitable.

Initially, CCC collected this copying money on a per-use basis, which was more efficient than the many-to-many negotiations that took place previously, but must still have been incredibly cumbersome. Beginning in 1984, CCC went to its “repertory” model, by which annual license fees allow unlimited copying of all the material covered by the license.

Because CCC effectively represents all the print content — newspapers, magazines, journals, and books, and, increasingly, photographs and blog material, it makes utter sense for users to pay them a fee to legitimize (almost) all their internal xeroxing at a stroke. CCC employs sampling-and-projection methods similar to what the music licensing agencies ASCAP and BMI use to grant radio station license fees to song owners and distribute money to rightholders.

Over the past decade, CCC has seen its revenues shift from being nearly 100% print copying to what is now 60% digital rights. They are exploring adding additional services, such as specifically licensing re-use in emails or email attachments.

CCC is a remarkable community resource that publishers need to understand better because there is no practical alternative to them for much of what they do. If two conditions apply, then CCC is essential to a publisher maximizing its revenue:

1. if the licensor needs material from that publisher, but from other publishers as well;

2. if the transaction value is low and won’t support much conversation or negotiation on either side.

The StartWithXML research definitely suggests that revenues that come with those two caveats attached will be a fast-growing part of publishers’ businesses for the foreseeable future. That means greater value for publishers in their CCC relationship in the years to come.

Our work with CCC began last December, just about the time discussion about the Google settlement and the proposed Book Rights Registry started to heat up. The question has arisen from several quarters as to whether the BRR offers competition to CCC. My own hunch is that if it ever does, that day is many years off. The BRR has a huge job in front of it validating and securing its database of books. CCC would have very few licensees if all it had were books; book publishers benefit from the presence of magazines, newspapers, and journals in the mix. The BRR is a long way from even thinking about setting up all those relationships.

Share this post

The Google settlement brings into bold relief what has been a quiet issue for book publishers, particularly the biggest ones.

They are largely in the dark about what rights they own.

It is not really hard to understand why they’re in this position and it isn’t really anybody’s “fault”, but it sure is a mess. The “rights database” or “contracts database” for most publishers consists largely of paper contracts in file drawers. That’s because all the big publishers gain a substantial portion of their income from backlist that was acquired years, decades, or even many decades ago, long before electronic rights databases were even conceived of.

There have been big improvements in the possibilities for storing this data in recent years. We’ve written extensively about StartWithXML processes and the idea that the rights information could “travel along” with the content in an XML document. That’s new stuff. So is the Klopotek system that actually builds the publisher-author contract from a rights database; the workflow had always had this work the other way around.

But these solutions, even for publishers farsighted enough to employ them, don’t solve the problem of thousands of legacy contracts in file cabinets. The Google-related issues primarily revolve around whether the rights to an inactive book (or, in the settlement lingo, what they would call “not commercially available”) have reverted to the author or are still held by the publisher.

Publishers also have problems with books on which they unambiguously have the rights to print and sell copies. What they don’t know, without looking at the original contract, is whether the language in it gives them a shot at an ebook, a print-on-demand edition, or allows them to include some of the material in that book in an electronic database. Even looking at the book contract might not tell them if they have the rights to use artwork that is in the book in any other edition. 

We are working on a future post on “business development”, which we figure is a big opportunity for publishers who have digitized a large amount of legacy content, which many (if not all) of the big publishers have. But any hopes of business development are stopped in their tracks if a publisher doesn’t know what rights are controlled.

The challenge of building a comprehensive rights database for the many tens of thousands of titles the big publishers control is probably cost-prohibitive. And even if money were no object, there would be a lot of empty cells in that database where information should be because contracts would be lost or incomplete. Figuring out how to attack that problem cost-effectively is one of the most important puzzles facing the senior executives of the major houses.

Share this post

Michael Tamblyn, the smart and dynamic leader of Booknet Canada who has performed minor miracles with the Canadian supply chain, gave a talk at his company’s tech forum a fortnight ago that has gotten a lot of deserved attention. It’s 30 minutes long, but it flies by and the presentation is great fun: very much worth watching.

I want to remark briefly on Michael’s six ideas. I’ll devote a later post to greater detail on one of them.

Michael begins by making the point that previous periods of financial difficulty have been nurturing times for new technology and new companies and new ideas. In troubled times, resources are cheaper and competitors are preoccupied, opening the door for new successes to be launched and nurtured. So, he asks, “what do you want your revolution to be?”

His first idea is that bibliographic data should be collected in the cloud and made available very cheaply or free to new or non-commercial users. Booknet has now started to acquire that data from publishers and will be crunching and distributing it. Although BNC’s activity is, for now at least, exclusively in Canada, this must be a very threatening notion to companies that make data collection a business (Bowker) or have data as a competitive advantage in a larger business (Ingram or Baker & Taylor.) The first requirement for a data aggregation service is that the sources of data must be in regular touch with it. That has been a handicap for Bowker in relation to Ingram or Amazon: publishers will more surely report a price change to an account than they will to a data aggregator. Booknet already has established very regular data exchanges with the entire Canadian publishing industry. They can pull this off and they are innovative enough that we would expect, when they have all the data, they will do more with it, and enable users to do more with it, than competitors do. This is potentially a game-changer for a lot of people. Michael hid it — the most disruptive idea he had to present — in plain sight by putting it first.

The second idea is that publishers need a StartWithXML workflow that doesn’t “kill people.” Michael lays out the problem very well, including showing that O’Reilly and Wiley, who have addessed it, have solutions most publishers can’t follow. (I have the “Wiley-O’Reilly Rule” for publishing, which is that those two companies always do things in the smartest way, but, for many reasons, it is usually impossible for other companies to imitate them.) From our work on the StartWithXML project I’m quite aware that this problem has been seen by others. Jouve North America and Value-Chain International, to name two, are working hard at making XML user-friendly for authors and editors now working in Word and for designers now working in Quark or InDesign. That’s essentially what Michael is suggesting. So this is a good idea but not an original one and smart people are working on it, although until this problem is solved we could certainly use more.

The third idea is that Michael wants to see a “DRM-free” ebook reader, but, by this he means “Date Repulsion Mode” rather than “Digital Rights Management.” This is a plea for an ereader that doesn’t itself look geeky and makes its user look sexy. This one isn’t up to the standards of the rest of the talk but it does provide some nice comic relief.

The fourth idea is the one we will explore in more detail (in a subsequent post): that publishers need a better tool than the present print catalog to help their reps help buyers reach the right frontlist buy decision.

The fifth idea is that the presentation of books online needs to improve. As Michael put it very well, we “search online” but “browse in stores.” He shows a number of interesting alternative presentations to the online bookstore standard pioneered by Amazon, but makes a crucial point, I think, when he talks about “curation” as the key. He wants online bookselling to move on from “we have all the books” to “we’ve distilled your interest down to this manageable number of choices”. As Michael said, “maybe it’s about presenting less.” There is great food for thought here (but no specific idea.)

The sixth idea is that publishers integrate generalists who know tech into their business more, so that technology is not isolated from the business practice. He lampoons the way tech is usually done in publishing companies, where a complete set of specs and an ROI are often needed before tech requirements for a new idea can be developed. This leads to the great advice that publishers need to place many little bets, learn from the ones which fail and “double down” on the ones that appear to succeed. This is the culture of innovation approach that is absolutely essential. Whether publishers can actually do it, of course, is another question.

Everything Tamblyn said in this address is thought-provoking, The initiative on data could be an industry game-charger. We’ll have some more thoughts on the frontlist buying component of his address soon.

Note to my readers: The first two weeks I did this blog I posted from Monday to Saturday. Last week and the week before I cut Saturday out. Now I’ve decided quality and sanity require me to go to 4 days a week, which will routinely be Monday to Thursday (when I think people are most likely to be paying attention.) Of course, inspiration or breaking news warranting commentary are always possible motivations for a post out of schedule There already was one day early on when I did two.

Share this post

When Joe Esposito first told me about blogs in about 2001 or so, there were very few. Michael Cader had PublishersLunch, but if Michael knew that it was an emailed blog, he didn’t tell me. And then blogs “happened”, as things do: gradually, then suddenly. And now I’m late to have one of my own. Really late.

I’ll admit that I fiddled with this a couple of times before. I started up at least twice, maybe it was three times. I decided I’d try it for a while, see if I could get into the pattern of writing regularly, and then reveal it to the world when I’d piled up a month or two of posts. But I never GOT to a month or two of posts. And because I was keeping what I was doing a secret, I had no traffic, no comments, and none of the rewards of interaction which provide the motivation to keep going. So I didn’t keep going.

I admired my friends Gwyn Headley and Michael Cairns for starting their blogs and sticking with them. Gwyn started by making a list of 365 things he could blog about, so he could refer to his list every morning if he needed to. It would take me five years to make a list of 365 things I could blog about.

But I’ve been getting some signs that “now’s the time.”

One follows from having been on Peter Brantley‘s mailing list for a couple of years. Twenty, thirty times a week, Peter sends us a link to something he’s found about publishing and digital change and invites comment. The posts and comments have increasingly sparked a response from me that amounts to a blog post. Once in a while Peter would ask me to extend a comment as a post to one of his blogs, PubFrontier. Then last week David Rothman flattered me by turning another Brantley list comment into a post on his Teleread.

Then, thanks to my friend Laura Dawson, I hired a really smart woman named Tess Strand Alipour and her partner Hamid Alipour to help me optimize traffic to idealog.com. They rebuilt the site so the speeches can accept comments, which was never the case before. They did other things that have boosted our traffic by a gazillion percent in the past two months. And they’ve told me that traffic will get even better if I post whatever I have to say to my OWN site rather than always to other people’s.

And then two weeks ago I started using Twitter. I was a bit slow to get it, but Tools of Change accelerated the process for me. The complementarity of Twitter and a blog seem pretty apparent.

On top of that, I’m involved with a large number of exciting new initiatives even in these troubling times. Filedbyauthor, a new venture I’m co-founder of being headed by my longtime friend and colleague, Peter Clifton, will be live with a web page for every author with an active ISBN in another month or so. FotoLibra, an open-source photo stock agency based in the UK that I’ve been involved with since its founding a few years ago, has achieved orbital velocity. We’re working out details, to be announced shortly, to take our StartWithXML project to London soon. We’re doing a research project on “Shifting Sales Channels” with BISG that has an online survey component and will culminate with the Making Information Pay conference on May 9.

So there should be plenty to write about.

Please write back.

Share this post