Charlie Redmayne

We got lucky with the speakers we booked for Publishers Launch Frankfurt


Branch Rickey, the fabled baseball executive who gave us racial integration, farm systems, and a host of great teams over fifty years, used to say “luck is the residue of design”. I’d like to think he was right, because we have really been lucky with our Frankfurt show for Publishers Launch, which we present in partnership with the Frankfurt Academy.

The first little lucky break was that we booked Charlie Redmayne to speak when he was CEO of Pottermore. Then earlier this summer he moved back to HarperCollins to become their UK CEO. And now his appearance at Publishers Launch Frankfurt will be his first public address since making the switch from the biggest author online play to running the UK operations for one of the industry giants.

We’d also had the idea that there were big online communities of readers that publishers could increasingly use for marketing. GoodReads had started out with the intention of being a gathering place to discuss books, but Wattpad and Scribd did not. Wattpad was a place for writers to expose their work and get critiqued by other writers; Scribd was a YouTube for documents, a place to put and find all manner of word-and-picture content online. But over time, both grew (as did GoodReads) to become large communities of word-interested people, perfect for book promotion. And when we booked them all a few months ago, both Wattpad and Scribd were well aware of the opportunity they afforded publishers.

But good luck has intervened in all three cases. GoodReads got bought by Amazon, validating (and complicating) their position as a leading gathering place for book readers. Wattpad has done a few promotional tie-ups, but a deal they did with the innovative publisher Sourcebooks that includes a line of co-published YA books and ebooks got a lot of attention. And Scribd just last week announced a new ebook subscription service, with the opening coup of landing a large number of backlist titles from HarperCollins catching everybody’s attention.

Needless to say, all three of their leaders — Otis Chandler of GoodReads, Allen Lau of Wattpad, and Trip Adler of Scribd — will have a bit more to tell our audience than we had bargained on.

We signed up Jonathan Nowell, the CEO of Nielsen Book, to talk to us about markets in transition. Nielsen has a view through both book metadata and book sales data of how markets are behaving in many countries; we wanted Jonathan to give us some clues about where we might see what has happened in the US and UK in a non-English marketplace. In the meantime, Jonathan’s company made a little fresh news too, buying the business intelligence units from Bowker in the US.

Of course, there’s a lot more at the show next Tuesday in Frankfurt. We’ll have Ken Brooks (now SVP for Global Supply Chain at McGraw-Hill) talking about how publishers should use data. We’ll have Russ Grandinetti of Amazon speaking about their view of markets in transition. Marcus Leaver of Quarto and Rebecca Smart of Osprey, two CEOs of extremely innovative global companies that are not Big Five sized, will talk about how they use being nimble and audience-focused to succeed. Micah Bowers, the CEO of Bluefire, will talk about what a DRM-free world would really be like. And Octavio Kulesz, an Argentine publisher/researcher who studies book markets in the developing world, will give us some insight into development that is quite different from what we’ve experienced in rich countries.

And we’re delighted to be hosting a panel of German publishing players about the transition in that market, which might become the first outside the English-speaking world to show real signs of disruption. It appears that this topic hasn’t even gotten as much discussion in Germany as we think it should; we’re delighted to be hosting a conversation that should be of great local interest far from where we live.

Our Frankfurt conference runs next Tuesday from 8 to 2, ending early to allow our attendees to make other meetings on what is always a busy book fair schedule.

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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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Full-service publishers are rethinking what they can offer


At lunch a few months ago, Brian Murray, the CEO of HarperCollins, expressed dissatisfaction with the term “legacy” to describe the publishers who had been successful since before the digital revolution began. For one thing, he felt that sounded too much like “the past”. “We need to come up with a different term,” was his assessment and he suggested that perhaps “full-service” was more apt.

I find I keep coming back to “full service” as an accurate description of the publisher’s relationship to an author. That’s what the long-established publishers have evolved to be.

It would be disingenuous to suggest that publishing organizations were deliberately created as service organizations for authors. They weren’t. In fact, as we shall see, the service component of a publisher’s DNA was developed in service to other publishers.

My Dad, Leonard Shatzkin, pointed out to me 40 years ago that all trade book publishing companies were started with an “editorial inspiration”: an idea of what they would publish. Sometimes that was a highly personal selection dictated by an individual’s taste, such as by so many of the great company and imprint names: Scribners, Knopf, Farrar and Straus and Giroux, for examples. Random House was begun on the idea of the Modern Library series; Simon & Schuster was started to do crossword puzzle books.

That is: people had the idea that they knew what books would sell and built a company around finding them, developing them, and bringing them to market.

And the development and delivery to the market required building up a repertoire of capabilities that comprised a full-service offering.

The publisher would find a manuscript or the idea for one and then provide everything that was necessary — albeit largely by engaging and coordinating the activities of other contractors or companies — to make the manuscript or idea commercially productive for the author and themselves.

The list of these services describes the publishing value chain. It includes:

select the project (and assume a financial risk, sometimes relieving the author of any);

guide its editorial development (although the work is mostly done by the contracted author or packager);

execute the delivery of the content into transactable and consumable forms (which used to mean “printed books” but now also means as ebooks, apps, or web-viewable content);

put it into the world in a way that it will be found and bought (which used to mean “put it in a catalog widely distributed to opinion-makers or buyers” but now largely means “manage metadata”);

publicize and market it;

build awareness and demand among the people at libraries and bookstores and other distribution channels who can buy it;

process the orders;

manufacture and warehouse the actual books or files or other packaged product;

deliver;

collect;

and, along the way, sell rights to exploit the intellectual property in other forms and markets, including other languages.

It has long been customary for publishers to unbundle the components of their service offering. The most common form of unbundling is through “distribution deals” by which one publisher takes on some of the most scaleable activities on behalf of other smaller ones. It has reached the point where almost every publisher is either a distributor or a distributee. Many are depending on a third party, quite often a competing publisher, for warehousing, shipping, and billing and perhaps sales or even manufacturing. All the big ones and many others, along with a few companies dedicated to distribution, are providing that batch of services. It is not unheard of for one publisher to do both: offering distribution services to a smaller competitor while they are in turn actually being distributed by somebody larger than they.

An assumption which influenced the way things developed was that the key to competitive advantage for a publisher was in the selection and editorial development of books and in their marketing and publicity, which emerged organically from their editorial efforts. All the other functions were necessary, but were not where many editorially-conceived businesses wanted to put their attention or monopolize their own capabilities.

About 15 years ago, working on VISTA’s “Publishing in the 21st Century” program, I learned the concept of “parity functions” in an enterprise. They were defined as things which can’t give you much competitive advantage by doing them well but which can destroy your business if you screw them up. This led to the conclusion that these things were often best laid off on somebody else who specialized in them, leaving the publisher greater ability to focus on the things which truly and meaningfully differentiated them from competitors.

Another driving force here was the way that bigger and smaller publishers look at costs and scale. If you’re very big, it is attractive to handle parity functions as fixed costs: to own your own warehouse, have a salaried sales force, and to invest in having state-of-the-art systems that do exactly what you want them to do. If you’re smaller, you often can’t afford to own these things anyhow and, on a smaller base, fluctuations in sales could suddenly render those fixed costs much too high for commercial success.

It is therefore more attractive to smaller entities to have these costs become variable costs, a percentage of sales or activity, that go up when sales go up but, most importantly, that also go down if sales go down. And the larger entity, by pumping more volume through their fixed-cost capabilities, subsidizes its own overheads and improves the profitability and stability of its business.

One of the things that is challenging the big publishers — the full-service publishers — today is that the unbundling of their, ahem, legacy full-service offering has accelerated. You need scale to cover the buyers and bill and ship to thousands of independent accounts. If you’re mainly focused on the top accounts — which today means Amazon, Barnes & Noble, Ingram, and Baker & Taylor for most general trade publishers — you might feel you can do it as well or better yourself with one dedicated person of your own.

And if you’re willing to confine your selling universe to sales that can be made online — print or digital — you can eliminate the need for a huge swath of the full-service offering. Obviously, you give up a lot of potential sales with that strategy. But the percentage of the market that can be reached that way, combined with the redivision of revenue enabled by cutting the publisher out of the chain, has made this a commercially viable option for some authors and a path to discovery for others.

So the consolidation of business in a smaller number of critical accounts as well as the shifting of business increasingly to online sales channels has been a challenge for some time that larger publishers and distributors like Perseus and Ingram have been dealing with.

But now the need for services and the potential for unbundling is moving further up the value chain. The first instances of this have been seen through the stream of publishing efforts coming directly from authors and content-driven businesses like newspapers, magazines, and websites.

To the extent that the new service requirements are for editorial development help and marketing, it gets complicated for the full-service publishers to deal with. The objective of organization design for large publishers for years has been to consolidate the functions that were amenable to scale and to “keep small” the more creative functions. So it is a point of pride that editorial decisions and the publicity and marketing efforts that follow directly from the content be housed in smaller editorial units — imprints — within the larger publishing house.

That means they are not designed to be scaleable and they’re not amenable to getting work from the outside. It’s much less of an imposition for somebody in a corporate business development role to ask a sales rep to pitch a book that had origins outside the house than it is to assign one to an editor in an imprint. The former is routine and the latter is extremely complicated.

But what does this mean? Should publishers have editorial services for rent? Should they try to scale and use technology to handle editiorial functions — certainly proofreading and copy-editing but ultimately, perhaps, developmental editing — as a commodity to assure themselves a competitive advantage on cost base the way they do now for distribution? Should publishers try to scale digital marketing? Should they have teams that can map out and execute publishing programs for major brands?

The way Murray sees it, a major publisher applies a synthesis of market intelligence and skills that can only be delivered by publishing at scale. He believes that monitoring across markets and marketing channels along with sophisticated and integrated analysis of how they interact provide an unmatchable set of services.

The scale challenge for trade publishers to collaborate with what I’m envisioning will be an exploding number of potential partners is to find ways to deliver the value of the synthesized pool of knowledge and experience efficiently to smaller units of creativity and marketing.

There is plenty of evidence that publishers are thinking along these lines. The most obvious recent event suggesting it is Penguin’s acquisition of Author Solutions. Penguin had shown prior interest in the author services market by creating Book Country, a community and commercial assistance site for genre fiction authors. Penguin suddenly has real scale in the self-publishing market. They have tools nobody else has now to explore where services for the masses provide efficiencies for the professional and how the expertise of the professionals can add value to the long tail.

There are initiatives that stretch the previous constraints of the publisher’s value chain that I know about in other big companies, and undoubtedly a good deal more that I don’t know about. Random House has a bookstore curation capability that they’ve coupled with editorial development in a deal with Politico that could be a prototype. Hachette has developed some software tools for sales and marketing that they’re making available as SaaS to the industry. Macmillan has a division that is developing educational platforms that might become global paths to locked-in student readers. Scholastic has a new platform for kids reading called Storia that involves teachers and parents that they’d hope to make an industry standard. Penguin has a full-time operative in Hollywood forging connections with projects that can spawn licensing deals. Random House has both film and television production initiatives.

These developments are very encouraging. One of the reasons that Amazon has been so successful in our business is that our business is not the only thing they do. One of the elements of genius they have applied ubiquitously is that every capability they build for themselves has additional value if it can be delivered unbundled as well. Publishers were comfortable with that idea for the relatively low-value things that they do long before they ever heard of Amazon. It is a good time to think along the same lines for functions which formerly seemed closer to the core.

Speaking of which, many of publishing’s most creative executives will be speaking as “Publishing Innovators” at our Publishers Launch Frankfurt conference on Monday, October 8, 10:30-6:30, on the grounds of the Book Fair. 

We did a free webinar with a taste of the Frankfurt conference last week and it’s archived and available and worth a listen. Michael Cader and I were joined by Peter Hildick-Smith of The Codex Group, Rick Joyce of Perseus, and Marcello Vena of RCS Libri.

Dominique Raccah of Sourcebooks, Helmut Pesch of Lubbe,  Rebecca Smart of Osprey, Anthony Forbes Watson of Pan Macmillan, Ken Michaels of Hachette, Stephen Page of Faber, and Charlie Redmayne of Pottermore (as well as Joyce and Vena) will all be talking about initiatives in their shops that you won’t find (yet) going on much elsewhere. And that’s just part of the program. There is a ton of other useful information — about developments in the Spanish language, the BRIC countries, the strategies of tech giants and how they affect publishing, and much more — that will make this the most useful single jam-packed day of digital change information you’ll have ever experienced. We hope to see you there.

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The ebook marketplace is a long way from settled


When we put on conferences, we sometimes book speakers because of who they are, or who their company is, but we also do our best to make sure the content of their presentation will be useful to our audience. So I had booked Matteo Berlucchi, the CEO of the British ebook startup Anobii, to speak at last January’s Digital Book World 2012 some months before the event for two reasons. For one, I had met Matteo at our Pub Launch London conference last June and he impressed me. And, in addition, his social-network-conscious ebook retailing operation has three major houses — Penguin, HarperCollins, and Random House — as investors.

A couple of weeks before DBW 2012, we got on the phone with Matteo to learn what he wanted to talk about. That’s when he told me he’d call for publishers to give up DRM because, as he saw it, their doing so was the only way he could compete for Kindle customers. As a conference organizer and promoter, I was instantly aware that he was handing us a major news break: a retailer partly owned by three Big Six publishers was calling for the end of DRM! There was some gallows humor on the call about how Matteo would bring his CV (curriculum vitae, which the Brits use more freqently than the American “resume”) along to New York.

But, of course, Matteo wouldn’t have been doing something like that without the knowledge of his owners. So it was not a stretch to draw the inference that three major publishers didn’t mind floating a trial balloon, or perhaps what they were thinking was that it would be good if Amazon knew they’d seriously consider this.

His presentation created a stir, as we knew it would.

But Pottermore created an even bigger stir when they demonstrated how to execute on the “no DRM” strategy, including how to position the big retailers in that context. As we all know now, the threat that Pottermore might be able to load Kindles with Potter books (by selling DRM-free; it would be hard if not impossible for an outside vendor to crack Kindle’s proprietary DRM to load “protected” content on it) persuaded Amazon to play ball. They send Potter ebook buyers over to Pottermore’s site to register and pay and then are willing to take the customer back to load a DRMd ebook file on their Kindle. (Meanwhile, Pottermore enables also loading a Nook file, an iBooks file, and even provides a non-DRMd epub file for more general use, all for the same single purchase.)

Back in the early days of ebooks, which was not a hundred years ago but actually about five, Brian Murray, the CEO of HarperCollins, invested in the company that became LibreDigital (now owned by Donnelley) because he had a vision that publishers should deliver their own ebook files. Murray’s concern at the time was about piracy and file control. Whatever it was, the ebook retailers (mostly Amazon back then) shot the idea down. No way were they going to trust a publisher, any publisher, to provide service at the level their consumers had been taught to expect from them. So the model we’ve lived with until Pottermore has been that each retailer has its own copy of the publishers’ ebooks, and they serve their customers and account to the publishers for what was sold.

Pottermore pointed the way back to Murray’s original vision.

A few weeks later, Macmillan announced that one segment of its company, tor.com, was going DRM-free, although not jumping into the full Pottermore model of serving the content themselves. (One Macmillan executive told me that they’ve been selling the books of anti-DRM crusader Cory Doctorow without protection for years, including through Amazon.)

Fritz Foy, the Macmillan EVP who oversees digital, is speaking about the DRM decision at our Publishers Launch BEA event on June 4.

Last Friday, the next round in this battle was fired. Berlucchi published a post calling on all the big publishers to copy the Pottermore model, and do it now.

How this will play out depends a bit on what happens with the DRM-free experiments now begun at Pottermore and about to start at Macmillan. If sales of their books collapse under the weight of ubiquitous piracy as a result, it would stop this kind of experimentation dead in its tracks.

It would also surprise a lot of people, including me.

If the net destructive impact on sales is too trivial to be measured compared with the DRMd status quo, then we are bound to see this practice spread, and quickly. And then all the biggest publishers could be compelled to return to Murray’s several-years-old vision with Pottermore’s execution template.

The question for the first publisher that wants to try this will be whether the power of a Big Six publisher to compel Amazon to play along is as great as J.K. Rowling’s Harry Potter franchise. It’s a really scary thing for them to do. After all, Rowling had zero digital revenue to protect and zero responsibility to anybody else for delivering it. All the major publishers have triple digit millions of dollars of Kindle revenue at stake and thousands of authors counting on them to deliver it.

But with Barnes & Noble now funded (by Microsoft) for battle for the next several years and Kobo and Apple committed to the fight as well, there’s a serious question as to whether Amazon would feel as comfortable going forward without one of the Big Six’s ebooks the way they have been willing to work without those from IPG.

In January 2010, John Sargent and Macmillan had a confrontation with Amazon and the retailing giant was forced to back down. The concessions that Charlie Redmayne of Pottermore (and he was, incidentally, recruited to that job from his position as Chief Digital Officer at HarperCollins) extracted from them are nothing short of stunning, but understandable if one considers what the impact of a Harry Potter ebook launch without the titles being available through Amazon would have been. (Oh, the headlines that would have generated!!!)

It’s easy for me to say, because I have nothing at stake, but I think Berlucchi is right. The big publishers can make this happen; it would change the game. I have trouble seeing any potential fly in the ointment for them except whatever would be the dangers of DRM-free. And that should be ascertained pretty well in the next few months.

There are still plenty of twists and turns to come in the evolving ebook marketplace.

It is important to remember that DRM isn’t Amazon’s only advantage or even their principal advantage. I’m not an Amazon fanboy (have you noticed?) and I read on an iPhone, but I buy most of my ebooks from the Kindle store because they offer the best shopping experience I’ve found.

However that (the shopping experience) isn’t a permanent advantage. The Kindle format and DRM are, as long as publishers feel DRM is essential.

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Things learned and thoughts provoked by London Book Fair 2012


This post contains a batch of observations from this year’s London Book Fair. Some of it recalled an experience from about 20 years ago. We’ll begin there.

In the early 1990s, Microsoft was on a mission to get computer hardware manufacturers to install CD-Rom drives in new machines. Microsoft had a very simple motivation. Software then was sold as hard goods. One CD-Rom could hold the data that required many, many diskettes. So if the storage and transfer medium were changed, the cost of goods for Microsoft would drop sharply. Since the value customers were buying was the code, not the package, Microsoft figured (correctly) that they’d be able to keep the price of software the same and simply make more profit if their customers could handle the CD-Roms. (Please note this logic applies very nicely to any discussion of what ebooks should cost in relation to print.)

But, of course, most people don’t load that much software, so the CD-Rom argument would be strengthened if content were also available on them. That inspired Microsoft to stage a half-day conference to “educate” the trade publishing community about the “opportunity.” (Of course, areas of technical and professional publishing, which had opportunities in delivering very large amounts of data, had already started to move in that direction; the value of CD-Roms was real and obvious to them. They also had vertical audiences of professionals that were perfectly able to hook up a CD-Rom drive to their existing machines, and did.)

At the conference, Microsoft basically showed all the “cool” things the computer could do: delivering sound and images (not video so much in those days) and hyperlinks. They basically said, “we don’t know how you’re going to make money on this; you’re the content experts. But we’re giving you this great new canvas to create on. Create!!!”

The excitement Microsoft and others were able to generate led to a burst of activity by publishers to create CD-Roms. Very few people found this new packaging of content particularly appealing at any price, and they actually were listed at very high prices. In other words, the techies had no clue about the content business and their advice to it was self-serving.
——
Last Monday in London, Susan Danziger of Publishing Point hosted The Great Debate. The proposition being debated was that the new tech companies would ultimately deliver a “knockout blow” to the conventional publishing establishment. Michael Healy of Copyright Clearance Center moderated.

Speaking for the new tech companies were two stunningly successful new technology entrepreneurs: Bob Young of Lulu and Allen Lau of Wattpad, both of which take anybody’s content and put it into circulation. Lulu’s core mission is seamlessly turning content into printed books and Wattpad’s is about organizing it for crowd-sourced consumption and discussion.

Opposing them were two publishing veterans (and, I’m happy to reveal, good friends): Evan Schnittman and Fionnuala Duggan. Schnittman is about to move from a global sales and marketing position at Bloomsbury to become Hachette Book Group USA’s head of sales, marketing, and digital. Duggan came from the music business, spent several years heading up digital at Random House UK, and is now Managing Director for International Course Smart, the digital platform created by a consortium of college textbook companies.

There is no ambiguity about what happened in this “debate”. The format required each of the approximately 250 attendees to register their opinions as to which side they favored on the way in and then again after the speakers had presented. The “establishment” side — the Schittman and Duggan side — picked up about 100 votes with their arguments from where the audience was when it came in. The incoming audience favored the proposition that the knockout blow was coming by a wide margin. After the debate, the margin was as wide in the opposite direction. (Some were undecided; so don’t drive yourself nuts trying to work out the math.) It is hard to imagine a more decisive outcome.

Of course, Duggan and Schnittman know quite a bit about technology. But neither Young nor Lau seemed to know anything about the content business. That shouldn’t be a surprise. Both of them have gotten rich in businesses that are ostensibly content businesses, but they aren’t. Their financial success is not dependent on the quality of content, the skill in developing or marketing it, or its inherent appeal. In fact, Lau kept touting the volume of what he hosted and claiming that technology would handle the curation perfectly adequately in the future. This was “proof by assertion.” It was the ultimate declaration of faith. The audience didn’t buy it.
———————
On the day before, Schnittman had hosted the Digital Minds conference. One of the keynote speakers was an old friend of his, Andrew Steele, who is the creative director of the very successful web site, Funny or Die. Steele told us the story of that business, which is instructive.

The original concept of Funny or Die was to crowd-source user-generated content, like YouTube. They’d build up traffic and monetize it. But there was a problem. Most of the amateur stuff they got just wasn’t funny. As Steele points out, we go to YouTube when somebody sends us a link for something good. We don’t go to YouTube and browse all the amateur content. There’s a reason for that. Most of it is crap. And most of what Funny or Die was getting from the crowd was crap. They weren’t getting page views. They weren’t going to succeed.

So they tried something new. (That’s called pivoting, for those of you who don’t spend enough time talking to the tech-and-finance community.) They got professionals to create content. Things changed quickly. By allowing their professionally-produced content to go off the site while it maintained the “Funny or Die” branding, they soon built a large audience. It now keeps growing and growing. Success is assured. But the lesson Steele emphasized was that professionally-created and -curated content succeeds where amateurs fail. He sees no reason why it should be any different in our world.
————————
I got a chance to visit with Charlie Redmayne of Pottermore. He was a bit bleary-eyed at the Digital Minds event on Sunday because the site had opened to the public that weekend. When I saw him on the show floor during the week he had just benefited from a full seven hours of zzzs, and he was enjoying his status as a game-changer.

The key to Charlie’s disruption was his willingness to substitute watermarking for DRM. He said it definitely made him nervous to do it, but he couldn’t see any other way to achieve what he wanted for Pottermore. He had to be able to sell to any device; he wanted to be able to allow any purchaser complete interoperability. There was no way to do that and maintain DRM.

His technical infrastructure is awesome. It stood up even though the average length of engagement by each user was three or four times what they had projected and the traffic exceeded expectations as well. But the most startling early news was what he reported about piracy.

Apparently, Potter ebook files started showing up on file-sharing sites pretty much right away after they opened. But before they could serve any takedown notices, Charlie says the community of sharers reacted. They said “C’mon now. Here we have a publisher doing what we’ve been asking for: delivering content DRM-free, across devices, at a reasonable price. And, by the way, don’t you know your file up there on the sharing site is watermarked? They know who you are!” And then the pirated content started being taken down by the community, before Pottermore could react. And very quickly, there were fewer pirated copies out there than before.
————————
I heard a rumor from a very reliable source that two of the Big Six are considering going to DRM-free very soon. The rumor is from the UK side, but it is hard to see a global company doing this in a market silo. Another industry listener I know was hearing similar rumors from different sources.

Could we see another crack in this wall sometime soon, maybe this year?

This is one lecture the techies have been delivering to the content folks that might have been on the money. I’ve always been skeptical that DRM prevents piracy, but I’ll admit that I was more concerned in the past than I am now that it would cost sales.
————————–
At the Digital Minds conference, there was a panel on children’s content publishing. Sara Lloyd, head of digital for Pan Macmillan, moderated a group that included Belinda Rasmussen from her own company, Eric Huang from Penguin, Jeff Gomez of Starlight Runner Entertainment, and Kate Wilson of Nosy Crow, which is a new children’s “book publisher” that seems much more focused on apps.

I have trouble seeing a future for book publishers in the kids’ content world. Everybody seemed to agree about what the apps of the future required (interactivity, game elements, animation) and that the parents of five years from now will be much more likely to hand their kids in the back seat an iPad than a book. So I asked them, as books diminish, what will publishers have to offer here? Wouldn’t this business belong to people who know gaming and animation, not books?

Kate seized the question from the stage and answered in a way that seemed to confirm my conjecture. “We don’t hire people with book experience,” she said. When I checked in with her later, she agreed that books were a revenue-generating convenience to get her company started. She sees the day when they won’t be part of her business anymore. What excited her (and well it should) was that they’d just made their fifth app and had created all the software tools they needed to build it while making the first four. The cost of creating their apps is plummeting because they’ve built the toolkit.

———————-

The news about the DoJ’s charges against five publishers and Apple and their settlement with three publishers broke just before LBF. It was a topic of much discussion, of course. Most people in the industry are horrified by the lawsuit and the settlement and there is really widespread fear about the consequences of ending the agency model. (The settlement doesn’t do that, but having three big publishers pushed to allow discounting for the next two years at least certainly cripples it.)

On Publishers Lunch, Michael Cader rounded up an impressive set of links to media around the country who are just as horrified as publishers, retailers, and agents at LBF were. Here are the stories from the New York Times, the Wall Street Journal (behind a pay wall, unfortunately), Slate, and the Los Angeles Times.

We understand that an amendment to the Tunney Act obliges the DoJ to take note and report to the court any opinions expressed in writing by the citizenry about a settlement that takes place in a case still being litigated. Cader notes that the law has usually been used to expand a judge’s ability to exercise oversight when the court believes DoJ hasn’t been tough enough. In this case, we’ll be asking them to pare back a settlement, which is apparently a less common use of the law. But the law allows us 60 days from the settlement to get those letters in and it is what we in the community can do to help fight this battle.

As I wrote in my summary of the impact of this settlement, it is one where Amazon and the cost-conscious ebook consumer win, but everybody else (and that means authors, publishers, retailers, and the public that wants good books, as I explained on NPR) lose. The low-price side of this is easy to understand. The publishing business side isn’t. (If this were a GOP DoJ, I’ll admit that I would have inserted a snide remark here about what this shows about their IQ.)

One point to note here, which didn’t occur to me at first, is that the three settling publishers are about to game the two fighting publishers (and, perhaps, Random House) the same way Random House gamed them when they stayed out of agency at first. Whether or not they stick with agency, they are now enabling discounting, so they might get the same benefit of the retailer discounting their goods while they retain their revenue that Random House got for the first year of agency.

In other words, more weight on the shoulders of the two companies, Macmillan and Penguin, who are carrying the fight for the whole industry. And that means more reason for the rest of us to try to help.

I am working on my letter to DoJ now, and I’ll publish it in a future post. I hope all my readers who understand what’s at stake here will also write to Justice. Address your letters to

John Read
Chief Litigation III Section
Antitrust Division
U.S. Department of Justice
450 5th Street, NW, Suite 4000
Washington, DC 20530

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What’s the greater fear for publishers? Amazon or piracy?


Pottermore changed the game this morning. Congratulations to Charlie Redmayne, their CEO.

The “aha” moment for me was when somebody on a listserv mentioned they’d bought Kindle editions of the seven Harry Potter books which, it had been announced, were available only from the Pottermore site.

Penny drops. First thought: Hnh? How did that happen?

Then the news came that Amazon was referring people off its site to Pottermore to buy the Kindle editions of Harry Potter ebooks. (It turns out that Barnes & Noble is doing the same.) There they register themselves and then can buy the ebooks.

This is, by far, the biggest concession that has been wrested from Amazon since John Sargent faced them down over the buy buttons on Macmillan print books on that January weekend in 2010 following the Thursday when Sargent flew out to Seattle to tell them Macmillan was going to the agency model.

In January at Digital Book World, in what turned out to be a prescient presentation, Matteo Berlucchi of Anobii (an ebook retailer based in the UK that is partly owned by three major publishers) observed that only by eliminating DRM could he sell to Kindle customers. He pleaded with publishers to do that.

Now Redmayne, who until November was working for HarperCollins, has demonstrated the truth in what Berlucchi said.

Back in about 2007, HarperCollins was instrumental in turning LibreDigital into an ebook delivery platform. At the time, Brian Murray, Harper’s CEO, articulated the vision that the publisher would just serve all the ebooks to customers, with no need to entrust retailers with digital copies. I believe one of the stated motivations was to reduce piracy by reducing the number of points of distribution of files. The idea was shut down pretty quickly because Amazon and other retailers wouldn’t go along. They would have said, and it would have been a reasonable point, that they had to control the service levels to their customers.

Redmayne and Pottermore have now demonstrated that if you will live with the anti-piracy protection of watermarking, rather than insisting on a digital hammerlock through DRM, you can gain extraordinary leverage.

Without DRM, as Berlucchi explained, anybody can sell ebooks that can be read on a Kindle. Once Pottermore decided they could live without DRM, they faced Amazon with a very difficult choice. The ebooks were going to go on Kindle devices whether Amazon wanted them there or not. Either they could ignore them or they could play along. I am sure the “play along” deal includes compensation to Amazon for the sales they refer (as it does B&N and, according to a quote from Redmayne, other distribution relations and affiliations will be enabled going forward.)

In other words, in a refreshing change from recent history, the content owner was able to present Amazon with a “take it or leave it” proposition. They decided to “take it”. They were wise. The game was changing either way.

The $64 million question is how the Big Six executives and strategists are viewing these developments. There is no author in the world with the power of J.K. Rowling to do this; she’s the Beatles. But, how about a big publisher? What would happen if Random House or HarperCollins (or one or more of the other four) told Amazon, “we’re taking off the DRM and we’re going to serve all our ebooks ourselves; you’re welcome to continue to sell our books on a referral basis”?

Could this change the strategy for Bookish going forward?

Obviously, this tactic won’t work if it is done by a publisher without tons of bestsellers and must-have backlist. In fact, it could generate a huge advantage for big publishers, assuming they can pull it off and smaller ones can’t.

I’ve been posing two questions in recent posts. “When does Amazon’s share growth stop?” and “Who’s left standing when it does?”

I put a new one at the top of this post. If publishers can overcome their fear of piracy, they will have, as Matteo Berlucchi proposed and Charlie Redmayne has just demonstrated, an enormous weapon to fight Amazon.

One entity that will definitely be “left standing” is Pottermore. And they’ll have the names of the people that were referred over to them by Amazon.

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“A Global Perspective on Digital Change” will be our first show in London


The first Publishers Launch Conferences show outside the United States, “A Global Perspective on Digital Change”, will be at the Congress Centre in central London on June 21, with the Publishers Association serving as our partners in putting on the event. We also owe special thanks to the PA’s group of Digital Directors, who were extremely generous with their time and insight. If you can be in London that day, you couldn’t find a better way to spend it than with us.

We’re still putting the finishing touches on what will be a one-day conference packed with illuminating conversation, but we can tell you quite a bit about it already. We aim to deliver strategic, practical, and focused discussion of near-term issues and opportunities. This won’t be a showcase for cool products or a venue to debate what the future might look like some day. We’re examining essential issues — ebook “export” opportunities; what happens to territorial rights; hiring and retraining to meet today’s challenges; revamping publishing systems for a dual print and digital paradigm; getting “found” on digital shelves — that publishing professionals should focus on now to thrive in the days to come.

The UK market is in between the US and the rest of the world in its migration from print to digital reading. Kindle and iPad sales really took off last Christmas and, while ebook penetration may be a fourth or less of what it is in the US, it has grown enough to be disruptive and to generate a consensus acceptance that very substantial change in the industry is inevitable.

On the one hand, my PLC partner Michael Cader and I have followed the developments in the US very closely so we have some firsthand experience with some aspects of what the UK trade is going through. On the other hand, we know history won’t repeat itself precisely. There are important differences in the markets and there is a substantial group of companies with experience and capabilities developed in the North American market that can hit the ground running in Britain or anywhere else in the world. That alone will make everybody else’s experience different than what happened in the US.

In order to be sure we were talking with the UK industry, not at it, we took some preparatory steps. In February, we put a large number of ideas for panels and topics up on Survey Monkey and invited 70 players in the UK book trade to express their opinions on them. In five days, 40 of the people responded.

Then we followed up by spending three days in London meeting with about 50 people to discuss our ideas and theirs. Our partners at the PA provided invaluable assistance, hosting our conversations and inviting us to join a regular meeting of the Digital Directors to get the insights of the most knowledgable people in the UK market. Those conversations were crucial in helping us focus properly on topics and in locating some key sources of insight. Frankly, despite our long experience working with the British publishing community (I have visited London on business three or four times a year for 35 years), putting this conference together would have been impossible without the help we got.

But because of that help, I think we’ll be presenting the UK publishing community with a lot of very useful discussion that hasn’t taken place at the many prior gatherings that have discussed book publishers and digital change.

One topic that we identified very early is the opportunity we see for publishers in Britain and Ireland to sell into the US market now without payng for a distributor infrastructure or taking an inventory risk. When we started to explore this topic, we learned that, of course, people are definitely starting to plan for it. Some are starting to exploit it. This was something we thought should be happening below the radar, and it is.

This is a peculiar opportunity, because it might be more important for independent UK publishers large and small than it is for the biggest global players. We’re still filling out the panel for this one, but we have Helen Kogan of Kogan Page, an independent whose company was already working in the US market (and therefore has some helpful experience to pass along) but who is seeing the expanded opportunity presented by digital, and Jean Harrington of Maverick House Publishers in Dublin. Jean is also President of Publishing Ireland and we invited her to join this particular conversation for a reason. The Irish diaspora in the US has a particularly strong identity with the old country and we expect books of Irish history and Irish fiction will find a substantial additional market through ebook sales in America.

We’re working on adding another British publisher and an agent to that dialogue.

Another topic arose out of a conversation that longtime UK consultant Mark Bide and I had while we were at Tools of Change in New York in February. How long will it be, I wondered, before half of UK sales are digital? Mark said he wasn’t sure about the timing, but he was sure that the publishers’ systems, overhead allocations, staffing, and infrastructure would require a lot of adjustment to be ready for that day. That’s a good conference topic, we thought.

Then, in our conversations at the PA 10 weeks ago, Anthony Forbes Watson, the MD of Pan Macmillan, told us he had charged his team with thinking through the question exactly as we had defined it. Anthony wants to know “what does 50% ebooks look like? What do we have to do to be ready for it?” The next day we talked to James Long of Pan Mac who told us that, yes, he was actually the person in the company with the primary responsibility for thinking this question through.

We decided the best frame for this conversation was “thinking about the future.” James, as he will tell us on June 21, is largely focused on what Pan Mac needs to do in systems development and integration, workflow changes, and skills development to be ready for a 50% digital world.

But there are two other aspects of preparing for the future we felt could be illuminated by other panelists we recruited.

Perseus, a US company whose Constellation division that provides digital services to smaller publishers is a global sponsor of Publishers Launch Conferences, is one of several companies in the world (Ingram in the US is another; so might Random House be in the US and the UK) that are investing in warehouses and print book distribution capabilities at precisely the time many publishers are disinvesting in them, precisely because they know that most publishers will have to disinvest in them. They’re trying to be there for publishers who want to dispose of fixed cost overheads for the shrinking print book market. We put Rick Joyce of Perseus into this conversation to cover the sensitive topic of consolidation on the physical side (a subject that Dominic Myers, the MD of Waterstone’s, famously put on the UK publishing community’s agenda a couple of months ago.)

Copyright Clearance Center, the US RRO which is also a global sponsor of Publishers Launch Conferences, has steadily called our attention to another industry-wide challenge: the need to manage rights more effectively and on a more granular level to take advantage of emerging opportunities to license chunks and fragments for apps, ebooks, and web sites. We thought that the voice for this topic in London should be local, and we were pleased that Sara Faulder, head of the Publishers Licensing Society, agreed to join this conversation.

Mark Bide has agreed to moderate this group in what I think will be a dialogue about publishers and the digital future unlike any the audience will have heard before. (Except, that is, if they are at our Publishers Launch BEA show on May 25, where we’ll have a different version of this conversation, one more focused on export and rights sales than infrastructure, but also covering the change we’ll see to selling more and more fragments.)

We’re not above stealing our own ideas and giving them a local spin. One panel that was extraordinarily successful at Digital Book World last January was one we describe in shorthand as “new skill sets”. It’s about capabilities publishers need to get that they don’t have and it is about process and workflow changes and the use of cross-functional teams as well as hiring in or training people with new skills. Charlie Redmayne of HarperCollins did that panel for us in New York in January and is reprising it at our BEA show. In London, he’ll be joined by Juan Lopez-Valcarel of Pearson and Jacks Thomas, the CEO of Midas Public Relations, on a panel moderated by Jo Howard of Mosaic Search & Selection Ltd. One of the key elements in the New York discussion of this, which we expect will arise again in London, is “when is it best to hire in the skills and when is it better to retrain the people I already have?” This is a subject every publisher needs to be thinking about that isn’t discussed in public very often.

We’ll have three of the top digital leaders of UK houses — George Walkley of Hachette, David Roth-ey of HarperCollins, and Sara Lloyd of Pan Macmillan — joining Michael and me for a dialogue about the big companies who have cut their teeth on the US market and are now taking their capabilities worldwide, starting in the UK. We’ll be talking about Amazon, Apple, Google, Kobo, Ingram, and Overdrive (the six clearly-declared and clearly-capable global ebook players) as well as Sony, aspirants like Copia and Blio, and US titan Barnes & Noble (which has shown no clear signs of global interest yet.) It looks to us like there is only one UK player with a global perspective, still-tiny cell phone provider Mobcast, but we’ll be learning from our panelists whether there are others we should be considering. And our audience will learn more about the North American companies which are bound to be a big part of the local market’s ebook life in the years to come.

We’ve reached a time when “metadata” is an important subject to discuss, no matter how dry or back room it has seemed. We were fortunate to get Graham Bell of EDItEUR to moderate a dialogue about this for us. He’s recruited Jon Windus of Nielsen and Karina Luke of Penguin to discuss it with him. We’re now looking for a retailer to join them. The condition of metadata in the marketplace is not good enough in enough places yet. This is costing publishers sales. This panel will explain why that is and what every publisher should do to make sure this isn’t a huge hole in the side of their boat as online sales, print and digital, grow and the impact of metadata grows right along with them.

We are also going to have a discussion of the future of territorial rights. Richard Charkin of Bloomsbury, a well-known skeptic about them, and David Miller, an agent with Rogers, Coleridge and White Ltd., have agreed to participate. We’re looking for a full-throated defender of the current territorial regime to join them in what will be more of a conversation than a debate. We wonder whether territorial rights make as much sense in a 50% ebook world as they do in the 5% ebook world we might now be in. The agent’s voice in this conversation might be the most important one because, after all, they decide whether the deals are acceptable or not.

One thing that the territorial rights dialogue will certainly entertain is what we should expect to see in terms of author initiatives. That topic is bound to come up in two other discussions as well. There’s one we’re now calling “experiments, best practices, and out of the box thinking” which is really about innovation. But we are going to focus on innovation in business models and practices and innovation in marketing, not on product innovation. We are still working on putting this group together, but we were very impressed with our preliminary conversations with two of the panelists.

Marc Gascoigne is at Angry Robot, a sci-fi imprint started by HarperCollins and then bought by Osprey. Angry Robot’s better mousetrap is its community focus; Gascoigne will make the case that doing that right (which many publishers say they want to do) requires that everybody, and that means every editor and everybody else, communicate directly with the audience. It is hard to see putting that across in many established trade houses.

Richard Mollet of the PA will moderate the conversation with the innovators.

Also on that panel will be Peter Cox, an agent with Redhammer. Cox is changing his own business model (providing more in the way of services to his authors, but charging them more for it and looking to represent fewer authors, not more) but he’s effectively changing the author-publisher relationship as well by making the author an active marketer and community gatherer. He’ll have examples and he’ll have ideas that will challenge the thinking of many publishers and agents in the audience.

The last panel of our day is intended as a Grand Finale. Michael Cader and I will sit with Stephen Page of Faber, Rebecca Smart of Osprey, John Makinson of Penguin, and agent Jonny Geller of Curtis Brown. We’ll get their take on the speed of the ebook takeup and its consequences.

How will British publishers cope in a market that may soon have no full-line bookstore chain? How will the industry cope with the rise of self-publishing? Is there any real danger of a consolidated English-language world in which London becomes subsidiary to New York? Or, in some companies, might it be vice-versa? Will both agents and publishers be changing the core business models which have prevailed for the past century over the next few years?

What excites me about the last panel — aside from the sheer smarts and savvy of the people we got to join us — is the diversity of their perspectives. The publishers run companies of different sizes and with very different approaches to building their publishing lists. The agent joining us has gained a reputation as one of the most digitally savvy players in the UK market. Michael and I thrive on spirited conversations with very smart people; we think we’re going to finish the day very stimulated and with big smiles on our faces.

And we think our audience will too.

Of course, before we get to London, we’ll be running our “eBooks Go Global” show aimed at international visitors and their trading partners at BEA. At that show, we’re particularly excited about two panels we won’t be doing in London. One is with a few booksellers already working with the new Google Ebooks capability reporting on how it is functioning for them. The other takes a slightly different approach to the “selling in the US” opportunity. Patricia Arancibia of Barnes & Noble, which has aggregated about ten times as many ebooks in Spanish as most people in Spanish markets will tell you exists, will open a lot of foreign publishers’ eyes to the possibilities that exist for them in the US market. We’ll also have a chat with Barry Eisler, the author who turned down half-a-million bucks to self-publish. And that’s not all. Tickets still available… And tickets still available for London as well.

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Building a new-fangled conference program the old-fashioned way


There is certainly more than one way to build a conference program. I have been putting them together since long before I learned about the concept of “crowd-sourcing”. I’m a bit of a plowhorse about some things so the Digital Book World conference program comes together pretty much the same way as the first digital book conference aimed at trade publishers I organized, Electronic Publishing & Rights, back in 1993. I put together a list of topics for panels or presentations and a roster of people who could either speak or lead me to speakers. Then I engender a lot of conversations between the conference-creation team and the potential speakers and audience to craft the topics, the framing, and the ultimate presentation.

Two other important conferences which appeal to an audience that overlaps Digital Book World, O’Reilly’s Tools of Change in February and SXSW in Austin in March — seem to take a different approach. As near as I can tell, they do crowd-source a lot of their programming. It appears to me that Tools of Change throws out suggested topics and requests that panels and speakers put themselves forward as components of the show. Then, presumably, the people in charge at O’Reilly (the heads of the conference are Andrew Savikas and Kat Meyer, and both of them are smart, knowledgeable, and discerning) choose what will comprise the show. At SXSW it appears that the candidates are selected by an online vote. It seems to me that you therefore guarantee that you’ll get the panels sponsored by the best campaigners, but not necessarily what would give your ultimate audience the best show. But I guess it works for them.

I should declare myself here. I am a fan of Tools of Change. I participated in a day-long brainstorming session several years ago which O’Reilly Media organized to plan the first conference. I missed that one, which was in California in the summer of 2007, but I’ve attended the three annual February conferences in New York, 2008-2010. It’s a great show and a great rendezvous for people thinking about technology and publishing. As this piece makes clear, we can’t handle every worthy subject in two full days of conference programming at Digital Book World; there’s room for lots of other conversation and TOC is a useful one. On the other hand, I have never attended SXSW. The program didn’t look like it had much relevance to commercial trade publishing (although it covered a lot of other things that neither TOC nor DBW does.) Plus it comes in the same month that has a chunk taken out of if for me by baseball spring training. There are things in life besides digital change…

As I think through what we do and how it all works, it is hard for me to see how we could produce nearly as good a show without the conversations. We are helped considerably in our work by a Conference Council of more than 30 top players in the industry from across houses large and small, agents, members of industry bodies like BISG, Association of Booksellers for Children, and the Frankfurt Book Fair, and some other consultants. We talk to literally dozens of other people as we put the show together, getting advice about whom to contact to speak and shaping and re-shaping our formulation of the panels and presentations.

This does, indeed, start in my head. I wrote a post in May outlining what I thought might be the major topics. We got comments on the blog and then we pushed the list out to the Conference Council in formation to get more input.

Once the Council was formed, we put the topic list up on Survey Monkey for them to give us feedback. What we were mainly looking for is “of what we postulated might be on the program, what’s essential and what’s a yawn?”, but we also got thoughts about things that could be combined or reframed. Then at the end of June, we had an exciting and rigorous 2-hour meeting with many of the Council and a number of our F+W colleagues at which we solicited even more ideas and honed our thinking further.

This process eliminated a number of topics that were on my initial list. Some of them were dropped because the group thought interest would be low (usually because they were too narrow or specialized); for others we couldn’t see who could speak to them effectively. But among those we knocked out were:

* Will non-US publishers start to establish a virtual sales presence in the US as ebook sales grow?

* How do publishers deal with image rights for old titles becoming new ebooks?

* What changes are on the horizon for publishers’ relationships with the library market?

* Are trade shows becoming an anachronism in the age of digital communication?

* How much of the solid print backlist is still locked up by rights issues?

* To what extent do publishers view single-title marketing as a practical endeavor?

All of these topics are “worthy” but, against very stiff competition, they didn’t make the cut.

The survey and Council conversation also helped us refine how we’ll approach a number of subjects.

Author royalties for ebooks will be handled as a survey and presentation, not, as first occurred to me, primarily through a panel of agents.

Our Council felt that how publishers make the business decisions to acquire content not necessarily intended for first use in a book was worthy of discussion. A subsequent conversation with potential speakers convinced us that “making books out of content that started another way” would be a relevant extension and should be in that same discussion.

Marketing and metadata were identified as topics that I should have included but hadn’t. As a result, we will have two metadata panels (one on core, one on enhanced) and we’re getting great help from BISG Executive Director Scott Lubeck (on the Conference Council, of course) putting these together. Although we have several panels that touch on marketing, I’m still thinking about the best way to tackle how single-title promotion has changed (which it has: profoundly).

What I had imagined as “The Tools Every Publisher Must Have in 2011″ morphed into a conversation about “industry solutions” — such things as Edelweiss and NetGalley and Filedby. A further refinement from our first idea is that we’ll have a panel of publisher-users discuss these, rather than go with my initial idea of inviting the companies themselves to present their solutions.

We knew we needed to discuss the future of bookstores. Our Conference Council meeting yielded the suggestion that we have analysts who follow industry stocks discuss that topic (and a hat tip to Michael Cader for that idea.) We’ve recruited Marianne Wolk, a market analyst who follows Amazon and Google, to speak, and she’s helping us look for other analysts or investors to join that discussion. And we’re also putting together a panel of independent bookstores; we’ve already talked to more than half-a-dozen and will talk to several more to pick the three or four that can deliver the freshest, most relevant, and most articulate content for our conference. (I would hate to leave this to self-selection.)

A panel I’d thought we needed on “ebook first” was dismissed as old news and too narrow.

We lean heavily on expertise that we know and trust.

Apparently, sometimes our technique gives us the same result as our counterparts’ crowd-sourcing. Liza Daly is the most compelling thinker I’ve encountered on ebooks. Last year we had her do 20 minutes on “ebook basics” which was one of the most-praised components of our program. I knew we had to have her back and a fast conversation with Liza quickly yielded the subject. She’s going to talk about “cost-effective development of enhanced content: how to display on multiple platforms without multiple headaches.” I’ll bet many attendees will find this the most useful 20 minutes at the show. I see that O’Reilly has her on their Frankfurt TOC program. That’s a good decision no matter how they arrived at it. (And I’d advise SXSW to make sure the ballot box is properly stuffed for Liza if she’s a candidate for their event next March.)

We had outlined three different research projects we wanted to present. Two are follow-ons from last year. Verso Media has a panel of “book” consumers and Bowker, working with BISG, has a panel of “ebook” consumers. This year, Digital Book World is sponsoring a follow-up effort with Verso and so the reports from both of those groups of consumers will be updated. (The BISG-Bowker effort was already ongoing.)

But then we discovered a new data-gathering opportunity with a company called iModerate, which does both surveys and online qualitative research, and we put them on an assignment of studying in depth a particular subset of ebook readers: those that read on multi-function devices like iPads and smartphones. Michael Cader suggested some ways to help the audience get maximum value from the data. As a result, we put those presentations together on the program, will distribute some data to the audience in advance, and have the presenters join in a panel after they say their own pieces. We thought that was a great idea; we’re doing it.

Maria Campbell, the veteran scout who has been on the foreign rights scene for decades, knows the players trading international rights better than anybody. So we drafted her to help us find the right person to lead a discussion of how the growth of ebooks will affect territorial rights. That right person is Cullen Stanley of the Janklow and Nesbit Agency, with whom we’re now working to craft the right combination of agents and publishers, American and foreign, to make this a balanced and informed discussion. The inclusion of agents is a key point of differentiation between Digital Book World and just about every discussion about the digital future I’m aware of. There are many aspects of the conversation about the digital future that simply can’t be sensibly conducted without the involvement of agents.

Lorraine Shanley, a member of our Council, is not only a consultant but also one of the leading executive recruiters in publishing. We wanted to examine how skill sets are changing in publishing. I thought I’d put together a panel of recruiters. Lorraine suggested that it made more sense to create a panel of executives who came to publishing from other industries. We liked her idea better and we now have Charlie Redmayne of HarperCollins as the first of the executives who will join Lorraine for that conversation.

I don’t mean to suggest we’re unique in doing things the way we do. Mark Dressler, who puts together programs for BookExpo America and for the Frankfurt Book Fair (and who will interview me about the Digital Book World program at a Halle 8 stage on Frankfurt Wednesday), is also a micro-programmer and very highly consultative and interactive in his program creation. I am sure some of what you see at TOC and SXSW resulted from interaction, too. I just can’t help thinking when I hear “calls” for programming how much the conversations we have inform and improve what we offer. Although I’m the proud Conference Chair who gets credit for putting together the Digital Book World program, it’s consultation with the most knowledgeable players in town that makes it what it is. Perhaps it is “crowd-sourcing” of a different kind.

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A brilliant Conference Council helps make a great Digital Book World


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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