Booknet Canada

Innovators and circumstances: the Frankfurt Publishers Launch show

In some ways, I think this year’s Publishers Launch Frankfurt show kicks off the next era of digital change in global publishing. The US and other English-speaking markets have established clearly that immersive reading — fiction and narrative non-fiction — is easily ported to screens for most people. In the past 18 months, changes in the UK book market have begun to resemble what we saw in the US, including Amazon’s dominance and bookstore shelf space shrinking.

While there are still many unanswered questions about how the English-speaking trade book world will look in a few years, I think the story of the next 12 months could well be more dramatic in non-English markets. The Frankfurt show is our most international; Americans are in the minority as attendees at this event.

We have packed 18 panels and presentations into our one-day Publishers Launch Frankfurt. (I like to keep things moving.) In keeping with the way digital change has taught us to think about the book business, we have two themes that are actually analogs for “content” and “context”.

Providing the “content” will be nine “Innovators”. The presenting innovators are publishing executives who are doing things inside their companies that are hard (or impossible) to find being done anywhere else. Yet.

Creating the “context” are a number of presentations on “Circumstances”. The context of the digital revolution differs by country, by language, and by time. What happened in the United States over the past five years offers clues, but not definitive answers, about what to expect in other countries over the next five years. We are exploring a wide range of circumstances that are defining the environment for publishing around the world in the future.

Both sets of presentations are extremely diverse.

We’re starting off the day with what I think will be one of the most impactful of the “circumstances” descriptions. Benedict Evans of Enders Analysis tracks the strategy of the five big tech companies whose activities are most likely to have an impact on publishing: Amazon, Apple, Facebook, Google, and Microsoft. He’ll describe the overarching objectives of each company and examine how book publishing fits into their thinking. The point will be to help publishers see how to take advantage of opportunities that will be created and avoid the pitfalls that will come along with the opportunities.

Jim Hilt, Theresa Horner, and new International Managing Director Patrick Rouvillois of Barnes & Noble will be talking about their company’s recent first move outside the US, launching the NOOK in the UK with local retailer partnerships. The UK will therefore become the first market outside the US to experience an initiative from the one company which, inside the US, has made a meaningful run at Amazon. If they can do it in Britain, then perhaps they can do it elsewhere as well. This is a “circumstance” everybody in the business will be watching.

Michael Tamblyn of Kobo will also speak. Kobo has opened in six major markets in the past year. They’re bringing an independent — but complete with devices, including new ones just announced — ebook retailing presence into many markets. The spread of the digital delivery infrastructure is definitely one of the changing circumstances that all publishers need to stay aware of and these two retailers are an important part of it.

The decline of print bookstores has been taking place for some time in the US, an effect not yet evident in much of the rest of the world. Peter Hildick-Smith of The Codex Group has been studying that, surveying book consumers about their purchasing decisions for a decade. He has data spelling out what the impact on sales and discovery is as bookstore shelf space contracts, which he’ll be reviewing for publishers to consider as they do their own forecasting about how fast bookstores will decline in their own markets. Hildick-Smith also has data about the reading habits of consumers on tablets as opposed to ebook readers which will be of great interest because so much more of ebook uptake outside the English-speaking world will take place on tablets.

We will have panels looking at two sets of emerging markets.

The BRIC countries — Brazil, Russia, India, and China — are watched by economists for emerging trends and we’re going to do the same. All of them are in the earliest stages of ebook uptake, but the beginnings are there in all four markets. We’ll have local representatives from each — publishers and retailers — to fill us in on the prospects and expectations in each of these countries.  The panelists will be Carlo Carrenho (PublishNews) from Brazil, Alexander Gavrilov (Book Institute) from Russia, Ananth Padmanabhan (Penguin) from India, and Lisa Liping Zhang (Cloudary Corporation from China.

We will also have a panel of leading Spanish-language publishing executives, chaired by Patricia Arancibia of Barnes & Noble, to discuss how digital change is playing out in the Spanish-language market. Spanish, like English, is the local language for many countries — more than 20 in the case of Spanish — and also has a very large market within the US. Digitization has been slow and there are unique issues having to do with the fact that control of copyrights is often housed in Spain, despite the fact that the biggest markets are in Latin America. Patricia and her panelists (including Arantza Larrauri of Libranda and Santos Palazzi of Planeta) will explore how fast that will change and when we should expect to see ebooks rising beyond the sliver of the market they have captured so far.

Michael Healy of Copyright Clearance Center is going to do a presentation on changes to copyright law and practice that may not be taking place where you live and publish but which could affect you where you do.

Noah Genner, their CEO, will report on the first fielding of a BookNet Canada survey of Canadian book consumers, the beginnings of a project that is planned to take place over the next couple of years. This may be the first intensive study of digital reading habits outside the United States so we thought it was worthy of a report to our global audience.

And a circumstance on every big company’s mind in publishing is how they will be regarded by the investment community as they navigate the digital transition. Brian Napack is now at Providence Equity Partners. Last year at this time he was President of Macmillan USA. Nobody is in a better position to discuss this topic than Brian and he’ll present on it at our event.

The innovative executives who will be navigating these shifting circumstances constitute the other half of our program. These speakers will be talking about initiatives that are often unique but are always pioneering. Our bet is that they are introducing a lot of practices that will be common in a couple of years.

Two of our innovators work from outside the English-speaking world but part of their story is that they’re not letting that cut them off from the biggest book-buying language.

Helmut Pesch leads the team that provides the internal ebook support for the German publisher Lubbe. But he’s using that position to pioneer. He’s teamed with a TV production entity to deliver a multi-media novel as a serial, launched an ebook first imprint, and is publishing original work in both English and Mandarin Chinese!

Marcello Vena oversees digital initiatives for the Italian holding company RCS Libri, which owns the book publishers Rizzoli, Bompiani and Fabbri Editori. Vena has started two ebook first genre imprints (thrillers for Rizzoli and romance for Fabbri) and is delivering those files DRM-free. He’s created a couple of very successful illustrated ebooks (this in a market where digital has barely cracked 2% of sales) and he also is trying out English-language publishing.

Stephen Page of Faber and Faber in the UK is building publisher- and author-services businesses while he innovates in his own publishing house. As an example of that, Faber has produced delivered two compelling apps for classic poetry: one on T S Eliot’s “The Waste Land” and one just released on Shakespeare’s Sonnets. And he’s building author communities that include live events and writing courses.

Rick Joyce, the Chief Marketing Officer for Perseus and their digital Constellation service, is exploring “social listening” tools, but with a twist. Joyce points out that working with these tools isn’t easy but he also is skeptical of the value which can be derived as they are often used: tracking the impact of social media efforts by a publisher. Joyce and his team are exploring whether the tools can be used to find the right marketing venues and approaches, down to the level of what blog comment streams to join and what nomenclature to use when they’re being worked. He will explain the tricky balance between being terribly specific in your search (like using the book title) which yields far too few opportunities and being so broad that the targeting is ineffective.

Anthony Forbes Watson is Managing Director of Pan Macmillan in the UK, part of the newly reorganized global trade division of Macmillan. Watson’s house is distinctly smaller than the four biggest UK trade houses (Random House, HarperCollins, Hachette, and Penguin) but much larger than any other player. Watson has reorganized his shop to get closer to both the authors and the markets. The evidence so far is that Pan Macmillan is proportionately outselling its competitors in digital; Watson will lay out the ways in which internal structural changes can lead to competitive advantage.

Rebecca Smart is the Chief Executive Officer of Osprey, a global publisher whose first vertical audience was military history. Since then, Osprey has executed acquisitions to put them into other verticals: science fiction, mind body spirit, food, and health. Her company is global and focused on audiences and she is building a multi-vertical publisher that will work with very diverse set of customers with a consistent approach and central services when possible.

Ken Michaels is the COO of Hachette Book Group USA. He’s also a big believer in SaaS: software as a service and he’s been rethinking and rebuilding Hachette’s internal technology structure in light of that belief. Hachette has also created some solutions themselves — among them, a capability to track metadata and ranks of books at ebook retailers and a tool for sharing content on Facebook — that they are making available as SaaS services themselves.

Charlie Redmayne is the CEO of Pottermore. He believes they’re building the digital publisher of the future and that a key element of that is to go where the audiences are: every device or channel that commands eyeballs is in his sights. Of course, Pottermore was built on the back of one writer’s amazing fictional brand and world. Redmayne believes what they’ve built might be applicable to other worlds from other authors. And that part of his presentation might get a lot of publishers and agents in the audience thinking what they have that might apply.

Dominique Raccah is the founder and CEO of Sourcebooks. Dominique is an indefatigable experimenter. She’s developed a poetry vertical. She’s experimented with “agile book creation” which invites the author’s audience to participate in creating the book. Dominique does more experiments before breakfast than most publishers do in a year. I put her on this program “on faith” because she told me she’s got 2-1/2 experiments to discuss that support her conviction that publishers have to completely rethink their businesses. (Today on a listserv she mentioned that she has “five startups” taking place internally!) Maybe I’ll find out exactly what she’s going to talk about at the conference before we get there, but I haven’t found out yet. But I’ve never been disappointed by Dominique and she says she’s more excited about what she’ll discuss at Publishers Launch Frankfurt than she has ever been about anything she’s done before. I am confident that we’ll be glad to hear what she has to say and all the other innovators will feel they are in very good company.

As we usually do at Publishers Launch events, Michael Cader and I will be opening the show with stage-setting remarks and doing a quick wrap-up at the end as well as popping up during the day whenever we think we can be helpful.

We got Peter Hildick-Smith, Rick Joyce, and Marcello Vena to do a webinar with us previewing what they’re doing at the event. Check it out! And our friends at the Frankfurt Book Fair did a little session with me talking about the conference as well. Take a look.


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Two anomalies on my desk this morning

While the AAP reports that US book sales are definitely down and my friends in major houses report a decline of 10% or more across the board, that’s not what we’re hearing from Canada and it’s not what we hard from small and midsize publishers responding to our BISG “Shifting Sales Channels” survey.

BookNet Canada reports 665 “same stores” in Canada reported units up 6.7% and dollar volume up 5% year on year in the first quarter! Michael Tamblyn tries to fish for reasons on the BNC blog, but there is no cause immediately apparent. Michael decides that it isn’t a Stephenie Meyer effect because there something like the Meyer effect happens just about every year.

The BISG and Idea Logical survey for “Sales Channels” was nowhere near as scientific, but we did get 245 responses which suggests the results are worthy of serious consideration.

One response in particular blew me away. We asked whether “overall sales for the past 12 months have been considerably weaker than for the two years prior?” Every large publisher we talked to said “yes” to that. Three significant smaller publishers we talked to said emphatically “no”, they just had record years. In the survey, 73% of large publishers said “yes” (sales had been much weaker) and 65% of smaller and midsize publishers said “no”!

We got a similar split on the question “have sales of your books fallen substantially any specific channels or accounts over the past three years?” Only 44.9% of the medium and small publishers said “yes” to that but 63% of the large publishers did!

So sales seem to be stronger for smaller publishers and smaller countries.

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Riffing on Tamblyn’s “6 Things”, Part 1

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.

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