Osprey

Although “digital change in publishing” has a year that lags the calendar year and this year won’t “end” until we have a read on how post-Christmas ebook sales were affected by the new devices consumers got for Christmas, the dropping of the ball in Times Square is the signal most of us respond to when timing our look ahead.

The signals about what to expect when the “digital year” ends are mixed, but not wildly encouraging. There are anecdotal reports of strong sales by US indies selling Kobo devices and Amazon has bragged about their Kindle Fire sales. On the other hand, B&N does not seem to be meeting its targets on the digital side and we’re learning that we don’t get the ebook sales surge from replacement devices that we get when a consumer first switches over from print. Most of the devices being sold now are replacements. And we’re also seeing tablet sales surging past ereaders. Prior analysis has told us that people spend more time reading books on ereaders than they do on tablets.

But quite aside from precisely where Digital Year 2012 ended up, there are five trends I think will be increasingly noticeable and important in trade publishing that are worth keeping an eye on in 2013.

1. Overall migration of sales from print to digital will continue to slow down.

We have already seen this clearly in data that has been reported throughout 2012. After ebook share growth that was in triple digit percentages for four years (2008-2011), this year we saw that switchover slow down considerably to substantially less than a 50% increase over last year.

Although the slowdown was pretty sudden, it shouldn’t really have been that surprising. Since the ebook era began in earnest with the arrival of Kindle in November, 2007 (5 years and a few weeks ago), it has been clear that heavy readers were early adopters. Both price and convenience were drivers that made the reader of a book a week much more interested in the new way of purchasing and consuming than the reader of a few books a year.

There appear to be those out there who believe this is a temporary lull and that the ebook switchover will shortly accelerate again. I really don’t think so. Although I don’t think the various surveys of reading habits have captured this, my hunch is that there are relatively few heavy readers left to make the change and those are, demonstrably, extremely resistant.

It is entirely possible that the death of Borders and changes at B&N reduced the amount of shelf space for books by as much as 50% in the two years that ended with 2011, a year ago. (That emphatically does not mean that print sales declined by that amount, or even that print sold in stores did.) That adjustment of shelf space to the reality of the purchasing shift consumers had made was a sudden over-correction, with the result that the remaining booksellers got a bit of wind at their backs. The data is hard to interpret, but it is possible that the indies benefited from that more than B&N did, perhaps as a result of B&N’s more intense focus on its NOOK business compared to the indies, who (despite the lift they got from selling Kobo devices this past Fall) are more focused on print.

This does not mean the digital switchover has ended. My gut (I don’t think there’s a great empirical substitute available here) tells me that store sales for books will continue to lose ground to online (print and digital) at a rate of 5-to-10 percent a year for some years to come. But that’s a much more manageable situation than the one bookstore owners had been dealing with for the several years leading up to 2012.

This is good news for big publishers. Their model is still built around putting print on shelves and managing a marketplace that works around a publication date focus and the synchronized consumer behavior that store merchandising really stimulates. It is good news for B&N too, if they can take advantage of it.

2. “Other-than-immersive” books will continue to lag in digital transition.

The commercial realities of ebooks and print are very different for immersive reading than they are for reference books, illustrated books, and picture books for kids. This difference is unfavorable for other-than-immersive books both in their creation and their sales appeal.

For immersive reading — books that are all text where you basically start on the first page and read through to the last — the “adjustment” to ebooks is both technically simple and uncomplicated for the consumer. Make it “reflowable” and it works. And the additional “labor” to make the two different versions (print and digital) is minimal.

But for books that aren’t consumed that way (reference) or which have important content that isn’t mere words, a single digital version might not work effectively (think of the difference in screen sizes and what that could do to a picture and caption or a chart). And compromises we make for a printed book — using six still pictures instead of a video or a flat chart instead of an animated one — can be downright disappointing in a digital context.

There are ongoing efforts to make creating good complex ebooks cheaper and easier, the most recent one coming from Inkling. Apple offers tools to do this, but then you can only sell the output through Apple. Vook was on this trail, although their most recent pivot seems to be away from reliance on illustrated books. The ebook pioneers at Open Road Digital Media have been making deals with illustrated book publishers — Abrams and Black Dog & Leventhal among them — and appear committed to solving this problem

But it seems to me that it might not be readily solvable. The inherent issue is that precisely the same intellectual output in both formats, which works fine for immersive reading, almost never does for complex books. So the core realities that have cushioned the digital transition for publishers of novels and biographies — that the cost of delivering to the digital customer is really very low and the appeal of the content is undiminished in digital form compared to print — don’t apply for illustrated books for adults or kids.

Will the how-to or art book in digital form ultimately be as close to its print version as has been the case for novels? Or will the how-to or art digital products in the future come from book publishers at all? Will there be any real synergy there? I don’t think we know that yet. As pressure grows in the retail marketplace, it gets increasingly urgent for illustrated book publishers to find out.

3. Mergers and consolidation among publishers are likely to become more common, after a long period when they haven’t been.

I have been a bit surprised about how little imagination has been evident from the kommentariat about the pending merger of Penguin and Random House. It seems like it is being viewed primarily for its cost-cutting potential (and that will be real), but I think it could actually be transformative.

I see two very big immediate wins for the combined company. They’ll be able to launch a credible general subscription, book-club-type offer using their own books exclusively (print and digital, although the big opportunity is digital). And they’ll be able to serve no-book-buyer retail accounts with a commercially-appealing selection of books working with a publisher’s full margin, not the thinner revenue available to a third party aggregator.

This is the two biggest of the Big Six joining forces. The other combination that is believed to be under discussion, putting together HarperCollins and Simon & Schuster, would be something like half the size of Penguin Random House and it wouldn’t have an equivalent reservoir and flow of highly commercial titles.

While Macmillan, according to the year-end letter from its CEO, John Sargent, remains determinedly independent, it is hard to see Hachette staying outside the merger tent as a stand-alone if Harper and S&S were to execute on the current rumor. The three of them together would present a competitive challenge to PRH and would have similar opportunities to open up new and proprietary distribution channels.

The merger activity will not be confined to the big general players. Both F+W Media (our partners in Digital Book World) and Osprey are building out the “vertical” model: providing centralized services to enable development of “audience-centric” publishing efforts for many and diverse communities. F+W has more than 20 vertical communities, most recently having acquired Interweave. Osprey, starting from a base in military history, has added science fiction (Angry Robot) and mind-body-spirit (Duncan Baird) to their list by acquisition.

The key in both cases is being able to add revenue channels to an acquisition as well as the time-honored objective of cutting costs through a combination. In different ways, all of the mergers we’re talking about here accomplish that.

4. Platforms for children’s books will become increasingly powerful gatekeepers.

Publishers discovered the power of platforms when Kindle showed them that they, not the publishers, controlled the customers and they, not the publishers, controlled the pricing. It took less than a year for Kindle to “own” enough customers that it would have been very difficult for any publisher to live without their sales, even without the leverage Amazon had as a significant customer for print.

Now we suddenly have a plethora of platforms that want to convince parents and teachers that they are where kids should be doing their reading. This is coming from the retailers: Amazon has a subscription offering for kids’ content and both Kindle and NOOK have parental control features. It is coming from the people who have been in this market all along: Storia from Scholastic and Reading Rainbow’s RRKidz. It is coming from outside enterpreneurs: Story Town and Ruckus.

And, before long, I think we’ll see branded digital subscription offers from the biggest publishers. (Why not?)

This suggests that a lot of shopping and purchasing decisions for young reading are going to take place outside of any environment that one could say now exists. And that’s going to be true pretty soon.

There are a lot of moving parts here. Sometimes the content has to be adjusted in some way for he platform, or can be enhanced for it. Sometimes the platform can facilitate a sale of stuff that is pretty much as it already was. Some of the platforms work on subscription models and others on discrete product sales models. But publishers (and agents) are going to be thinking about what those deals ought to look like. For now, platform owners are eager to engage the content so they have something to capture an audience with. When the audience is captured, the power shifts to the platform owner for anything but the most highly visible and branded content.

This will be an interesting arena. (And one that will be discussed at length at our conference, “Children’s Publishing Goes Digital” on January 15.)

5. Marketing for publishers will be a constant exercise in learning and reinvention, and increasingly difficult to separate from editorial.

I spent a post recently trying to describe an “audience-driven” rather than “title-driven” or, worse, “title-on-pub-date-driven” approach to marketing. When you get down to actually trying to use the biggest new tools publishers have in the digital world — the top two coming to my mind are using email permissions and social media for dirt-cheap communication and lots of data sources with more and more tools for analyzing big data — you very rapidly realize that it is very limiting to think about using them on a per-title basis.

Rick Joyce of Perseus presented some ground-breaking thinking at our Frankfurt event about using social listening data tools for publishing marketing; he learned that the tools were most effectively applied across categories rather than for titles. (Part of the reasoning here was that using the tools is time-consuming and therefore expensive; part of it is that you just get more actionable information categorically than you do title-by-title because you’re crunching more data.)

So when publishers start to conform their publishing and marketing to what the new tools can do best (we’re still in the stage where we’re mostly trying to make the tools do what we did before), it will mean an explosion in the number of marketing decisions that have to be made (because the age of the book will not be a central factor in the decision to include it in a marketing opportunity.) This is accompanied by the big increase in decisions required to respond to the near-instantaneous feedback marketing digital initiatives deliver.

All of this will continue to be very challenging to the structure and workflow practices in large companies.

I think the clearest indication that marketing is reaching its proper 21st century position in publishing will be its increasing importance in driving title selection. As publishers become more audience-centric, it is the people who are communicating with the audience (the marketers, but also the editors, and the line between them will get fuzzier, not that it hasn’t sometimes previously been blurred) who will see what’s needed that isn’t in the market yet. In a way, that’s always happened. But in another year or three, it will be a formal expectation in some structures, and will have a defined workflow.

One obvious trend I’m not discussing here is “globalization”. In fact, one analyst sees exploiting global opportunities as one of the big wins of the Penguin Random House merger. With all the retailers publishers know well (Amazon, B&N, Kobo, Google) expanding into new countries every month, there will be no shortage of reminders that publishers should clear rights and price books in all territories for which they possibly can. But the problem starts further upstream than that, with the licensing practices of agents, who still often maximize advances-against-royalties by selling books market by market. There is a long gestation time on deals, so even if the dealmaking changes, it will take a while for that to be reflected in more ebooks on sale in more places. That’s why I am not expecting globalization to have a major commercial impact in 2013 and it is also why I see it as a more distant opportunity for the new PRH business than the ones I suggested in this piece.

Two announcements made in the last two weeks caught our attention.

One was Simon & Schuster’s deal with Author Solutions, creating a new Archway Editions publishing imprint. This was the third such major deal with a publisher for ASI, following similar arrangements forged with romance publisher Harlequin and Christian publisher Thomas Nelson (now owned by HarperCollins).

The other was Publishers Lunch’s deal with Random House, creating the new online bookstore-lite, Bookateria. This was the second such major deal with a heavily-trafficked website for Random House, following a similar arrangement forged with the political site, Politico.

Of the two, the S&S-ASI connection offers less obvious benefits. ASI has apparently built a remarkably efficient engine to get a book delivered from a manuscript. And every publisher has many times more authors knocking at their door than they could possibly consider publishing. And many of them will never find a publisher so would be good candidates for self-publishing services.

But there are both ethical and practical commercial challenges to converting author aspirants who come looking for a deal to customers willing to buy self-publishing services. ASI seems to have persuaded publishers that the conversion works enough of the time to make the connection between publishers and ASI worth making. Let’s remember that the Harlequin and Nelson deals preceded both the acquisition of ASI by Pearson and the deal announced last week with S&S. Presumably, S&S and Pearson knew something about the results from those prior deals and were proceeding with some evidence that using a known publisher as a front door for self-publishers was an idea that works.

On the other hand, neither Nelson nor Harlequin has trumpeted the results of their ASI deal and authors may notice that the legions of successful self-publishers (John Locke, Amanda Hocking, Hugh Howey, Bella Andre, and more than a few others) seems bereft of ASI clients.

There are more questions than answers generated by these deals so far. It appears that the publishers really have nothing to do with their new customers aside from bringing them into the tent. (S&S says in the press release that they’ll be watching the sales of Archway books to see what authors it might want to sign for the house. But isn’t that what every big publisher should be doing across the self-publishing landscape right now?) Will the association with self-publishing damage the core publishing brands? Will the publishers feel some ownership of the self-publishers from whom they profit? Will real synergies develop between the publishers and their ASI connections, or will this remain largely a branding trick?

While all of that remains to be seen, if the ASI-publisher connections deliver revenue to publishers with little or no effort on their part, other publishers will be open to doing the same thing. The question is whether they do.

It is not difficult to discern the value delivered by the collaboration between Publishers Lunch and Random House to deliver Bookateria, a search-and-shopping experience with a Publishers Lunch perspective. It gives Lunch an easy way to deliver real convenience and value to its audience and modestly monetize it at the same time. And it further tests and proves the concept Random House first demonstrated with Politico. By delivering the tech around a pretty complete catalog of available books able to be monetized through affiliate relationships, Random House has created a “product” that any web site with substantial traffic can benefit from in the way Lunch now will.

Publishers Lunch, because it is constantly reporting book news, has more opportunities than the average site to link to purchase pages for a book it is mentioning. It regularly refers to various and sundry lists of award winners and top sellers and it makes nothing but great sense for them to make purchase of these books easy (and make a little money at the same time.)

It may be (and I’m not on the inside of any of these deals; aside from our partnership in Publishers Launch Conferences, Michael Cader of Publishers Lunch runs his businesses and I run mine) that Publishers Lunch is taking a more active role in merchandising books than Politico is. That would make sense. Books are PL’s business, and they have to both be thoughtful and appear thoughtful about how they present them. And since this capability is probably at least as much about providing utility to site visitors as it is about increasing revenue, the merchandising would want to reflect the site’s knowledge and point of view.

I have long believed that book and ebook distribution would ultimately follow the web’s innate tendency to verticalize audiences. Why wouldn’t you buy your political books or sports books or knitting books where you learn about them and be guided more by recommendations of “domain experts” than “book experts”?

I had visualized this verticalization working out from a publisher, which would use its content to attract audiences which it would then monetize many ways, including by selling them books and ebooks of its own and from other publishers. To varying degrees, this is what I saw unfolding with Hay House, F+W Media, Osprey, and Harlequin with the most highly-developed Big House example being Tor Books inside of Macmillan.

Some new propositions — notable among them being the still-promised book retailer Zola and the distributed sales “apps” from Impelsys and Ganxy — were built around the understanding that book curation was most effectively done by the experts and communities functioning in any domain and it made sense to deliver a way for them to enable their own ecommerce for the content they suggested or reported on to their audiences.

But it is in a trade publisher’s DNA to work with aggregators and intermediaries (which is what bookstores, mass merchants, libraries, wholesalers, and special sales outlets are). Random House applied the same vision of distributed and vertical curation but decided that they didn’t need to offer the entire ecommerce solution to execute on it.

So Politico and Publishers Lunch — and, one presumes, more to follow — use Random House to provide their catalog and metadata and some level of curation and they all rely on the existing retail network to complete the transactions and do the fulfillment. Random House and their partners (presumably) share affiliate revenues from the retailers, not the “full margin” on the content sales.

This could be viewed as a bit klunky from the customer’s perspective and it definitely will be for some. You wouldn’t be “shopping” and then “checking out” as two discrete and serial experiences. Each “buy” decision would take you to a retailer choice and then deep-link you to the purchase page for that book at the retailer you choose. Anybody who wants to purchase multiple titles would definitely find this less convenient than just shopping on a retailer’s site.

But if the retailer were delivering the curation and information that Politico or Publishers Lunch is offering in the area of vertical interest, then the customer would probably do their multiple-title shopping at the retailer anyway. The Random House-powered strategy is more opportunistic than that. It’s more about facilitating impulse purchasing than attracting a shopper.

And when you stop and think about it for just a minute, you realize that conversion is likely to be much higher by offering customers a choice of their favorite retailers than it would be if you were signing them up to a new account with a retailer (web site) they hadn’t purchased from before. This is true even in the case of Publishers Lunch, which has credit card numbers for a large number of its most regular visitors because they’re members of Publishers Marketplace. It would be even more of a barrier to making a purchase at Politico and other non-membership sites.

One veteran publishing marketer told me that conversion on clickthroughs to Amazon were very high in his experience, ranging from 8% to 17%. He really doubted whether any fledgling retailer could achieve anything like that rate of conversion.

That constitutes evidence that the revenue achievable as an affiliate could well be higher than what could be gained executing the sales and keeping “full margin”, which brings along with it full responsibility for maintaining an infrastructure and providing customer service. None of that is necessary working as an affiliate.

There is a superficial similarity to these two initiatives. Both involve a company offering tech at scale to help another company monetize its existing network in ways that it doesn’t now. How effective that monetization really will be is still an open question. But it would appear that the ASI service to publishers entirely depends on that: aside from whatever revenue it can yield, there’s no other real benefit to the publisher and, in fact, it could confuse or cheapen the perception of their core business.

The Random House offer to websites, on the other hand, has all sorts of “soft” value. The partnering web site unambiguously offers a service to its site visitors by enabling rapid purchase of relevant content encountered while pursuing their vertical interest. Selling content and earning revenue is only one way to win; they also benefit from more traffic and more stickiness, the inevitable by-products of improving the value being offered any site’s visitors.

What is also interesting to contemplate about the Random House-powered distributed curation is what its potential impact will be on the retail network. Enabling the content purchaser to choose her retailer would, one assumes, distribute the sales from their site in pretty much the same proportions as the market had already.

On the other hand, it might also make it easier for consumers to switch. It could dilute the advantage Amazon has built through their usually superior (compared to other retailers) curation and presentation. It would make it much easier for a supporter of independent bookstores to make the choice to buy from them. (The choices presented are obviously flexible. Politico offers “Politics and Prose” bookstore, an indie based in Washington that specializes in political books. Bookateria instead offers Indiebound, the ABA’s way of sending you to an independent retailer.)

One more observation. There have been two retailers expected to make their appearance anytime now for the last six months: the big publisher-created Bookish and the previously-mentioned Zola Books. The rumors about both of them say that they are having a really hard time making the metadata we have in our industry work well enough to execute on ecommerce. Obviously, Random House had to overcome that same problem to deliver their proposition (although perhaps the bar was a bit lower since they execute sales as an affiliate rather than transacting themselves). An informational page for Bookateria makes it clear that metadata improvement will be an ongoing work-in-progress.

As the other big publishers look at what Random House is doing and wonder if they should be doing the same, they might want to rethink the digital aphorism that anything, once done, can be replicated in half the time and for half the cost. Even if that’s true, starting now to replicate the Random House capability could take a year or more; this is not something that Random House dreamed up last week. In a year, Random House could pick off a number of very desirable large sites and improve their metadata organization even further. I don’t think any competitor who takes this concept seriously will be able to afford to wait for proven success or failure to start developing if they want to be in this game.

NPR did a great job of choosing four minutes of me to sound wise on All Things Considered as part of a publishing roundup. Or you can read a summary of my bit instead of listening to it. We start with the Random House and Penguin merger and meander a bit from there.

This is the last post for the fourth calendar year of The Shatzkin Files. Our annual rhythm is that our quietest week of the year (this one) is followed rapidly by our most intense: the 7-1/2 days of conference programming in four days on the calendar that comprise Digital Book World  2014 and the two Publishers Launch events that bookend it. 

Happy New Year to all my readers, and especially the many of you who take the time to add to the conversation here in the comment string. Double-especially to those of you who dispense your wisdom in concise doses.

Blog posts have been scarcer for the past couple of months because I’ve been so engaged with a major responsibility: putting together what amounts to 7-1/2 days of conference programming that will be presented on four days next month in New York City.

As most readers of this blog probably know, we’re responsible for the programming of the two-day extravaganza that is Digital Book World. DBW 2013 — taking place on January 16 and 17 at the Hilton New York Hotel — will be the fourth iteration of the event, which aims to explore the commercial challenges facing trade publishing in the digital transition. DBW is not about technology per se; it is about the business problems publishers must cope with in an age of technological change.

DBW’s main two days are divided between morning plenary programming — all 1500+ people in one big room — and afternoon breakouts. We’ll have up to five simultaneous breakout sessions in each of three slots each day. So we have what amounts to 4-1/2 days of programming in the breakouts plus one on the main stage.

Because people really do come from all over the world to attend DBW, we were delighted to agree when they asked us at Publishers Launch Conferences (the conference business I own with Michael Cader) to add a show on each side of theirs to build out a week of programming. (The team at DBW itself are also putting together some pre-conference workshops that will run on Tuesday.)

So on Tuesday, January 15, we’ll do our second annual “Children’s Publishing Goes Digital” conference at the McGraw-Hill Auditorium (put together with the invaluable assistance of our Conference Chair and close friend, Lorraine Shanley of Market Partners). And on Friday, January 18, we’re presenting (in conjunction with the DBW team) a new program called “Authors Launch“, a full day of marketing advice for publisher-published authors. (Self-published authors are welcome and will learn a lot, but the program is framed for authors who are working with publishers, not looking for ways to avoid them.)

Programming the “Children’s Publishing Goes Digital” show revealed what we think will be the most important theme in the children’s book space for the next few years: the development of  digital “platforms” that, like subscription offerings (which some, but not all of them, clearly are), will “capture” consumers and make them much less likely to get ebooks and other digital media from outside of it. The list of platform aspirants in this space is long and varied: Storia from Scholastic; RRKidz from Reading Rainbow (the TV show brand); Poptropica from Pearson (which launched Wimpy Kid before it was a book); Magic Town; Disney; Capstone; and Brain Hive. All of them are presenting, as well as NOOK, which, like Amazon Kindle, has announced parental controls on its platform that encourage parents to manage their kids’ reading experience there.

There are other big issues in children’s publishing, particularly the creation of original IP by publishers so they can better exploit the licensing opportunities that follow in the wake of successful kids’ books. We’ll have data presentations from Bowker and from Peter Hildick-Smith of Codex to help our audience understand how kids books are found and selected outside the bookstore in today’s environment.

But we know that the digital discovery and purchase routines will be markedly affected by the platforms as they establish themselves. Publishers are faced with an interesting conundrum. They can’t reach the audiences that are loyal to a platform without going through the platform. But it is the presence of many publishers’ books that strengthens the attraction of the platform and, once it gains critical mass, the value of the content to it (and probably what it will be willing to pay for the content) is reduced. So publishers licensing content to these platforms may be strengthening beasts that will ultimately eat them. I think the roundtable conversation Lorraine and I will lead at the end of the day, which will include publishers Karen Lotz of Candlewick, Barbara Marcus of Random House, and Kate Wilson of Nosy Crow, will have interesting things to say about that paradox.

We’ve developed some “traditions” in the four years we’ve been doing Digital Book World. As we’ve done the past two years, the plenary sessions will open on Tuesday with the “CEOs’ view of the future” panel organized and moderated by David Nussbaum, the CEO of DBW’s owner F+W Media and the man who really dreamed up the idea of this conference. David will be joined this year by Marcus Leaver of Quarto, Karen Lotz of Candlewick, and Gary Gentel of Houghton Mifflin Harcourt. And Michael Cader and I will — as we have every year at DBW — moderate a panel to close the plenaries, “looking back and looking forward” with agent Simon Lipskar of Writers House; Harper’s new Chief Digital Officer, Chantal Restivo-Alessi, and Osprey CEO Rebecca Smart.

Among the presenters on the main stage who will be unlike what our audiences usually hear at a digital publishing conference will be Teddy Goff, the digital director for the Obama campaign, who will talk about targeting and marketing techniques that might serve us well in the publishing world; Ben Evans of Enders Analysis in London, who will tell us how publishing fits into the strategies of the big tech companies (Amazon, Apple, Facebook, Google, and Microsoft) that he tracks regularly*; ex-Macmillan president and now private equity investor Brian Napack, talking with Michael Cader about the investment climate in publishing; and Michael D. Smith, Professor of Information Technology and Marketing from Carnegie-Mellon, talking about a study he and his colleagues have done on the real commercial impact of piracy.

(We’ve also scheduled a breakout session for Teddy Goff so he can talk more about the Obama campaign for those in attendance who want to learn more of its lessons to apply.)

We’re also delighted to have gotten Robert Oeste, Senior Programmer and Analyst from Johns Hopkins University Press, to deliver his wonderfully insightful, entertaining, and informative presentation on XML, the subject so many of us in publishing need to understand better than we do. And we will after he’s done. (We’re also giving Oeste a break-out slot to talk about metadata which I’ll bet a lot of our audience will choose to attend after they’ve heard him on XML.)

Some authors have had remarkable success without help from publishers in the past year, but few or none more than Hugh Howey, the author of “Wool”, who has just signed a groundbreaking print-only deal for the US with Simon & Schuster. His dystopian futurist novel has sold hundreds of thousands of self-published ebook copies and rights all over the world and to Hollywood. We’ll have a chat with Howey about how he did it and we’ll be joined by his agent, Kristin Nelson, for that dialogue. Kristin will stick around to join a panel of other agents (Jay Mandel of William Morris Endeavor, Steve Axelrod, and Jane Dystel from Dystel & Goderich) to talk about “Straddling the Models”: authors who work with publishers but are also doing some things on their own.

We will have several panels addressing the challenges of discovery and discoverability from different angles. One called “Closing the New Book Discovery Gap” teams Patrick Brown of Goodreads with three publishing marketers — Matt Baldacci of Macmillan, Angela Tribelli of HarperCollins, and Rachel Chou of Open Road — and is chaired by Peter Hildick-Smith. That will focus on what publishers can do with metadata and digital marketing to make it more likely their titles will get “found”. Barbara Genco of Library Journal will share data on library patron behaviors and then helm a panel discussion with Baker & Taylor, 3M, Darien Public Library, and Random House exploring the role of libraries in driving book discovery and sales. Another session called “Making Content Searchable, Findable, and Shareable” introduces three new propositions from Matt MacInnis of Inkling, Linda Holliday of Citia, and Patricia Payton of Bowker, along with SEO expert Gary Price of INFODocket. Publishing veteran Neal Goff (who is also the proud father of Obama’s digital director) will moderate that one. MacInnis, Holliday, and Payton offer services that will help publishers improve the search for their books. Price will talk knowledgeably about how the search engines will react to these stimuli.

We’re covering new business model experimentation (with Evan Ratliff of The Atavist, Brendan Cahill of Nature Share, Todd McGarity of Hachette, and Chris Bauerle of Sourcebooks) where publishers discuss ways to generate revenue that are not the old-fashioned ones. We’ll underscore the point that we’re about changes caused by technology rather than being about technology with our “Changing Retail Marketplace” panel, featuring publishers and wholesalers talking about the growth of special sales (through retailers that aren’t bookstores and other non-retail channels).

The future for illustrated books will be discussed by a panel with a big stake in how it goes: John Donatich of Yale University Press, Michael Jacobs of Abrams, Marcus Leaver of Quarto, and JP Leventhal of Black Dog & Leventhal. Two publishers who have invested in Hollywood — Brendan Dineen of Macmillan and Pete Harris of Penguin — will talk about the synergies between publishing and the movies with consultant Swanna McNair of Creative Conduit.

We will have major US publishers and Ingram talking about exports: developments in the export market for books — print and digital. And we’ll have some non-US publishers joining Tina Pohlman of Open Road and Patricia Arancibia of Barnes & Noble talking about imports: non-US publishers using the digital transition to get a foothold in the US market.

One session I think has been needed but never done before is called “Clearing the Path” and it is about eliminating the obstacles to global ebook sales. That one will start with a presentation by Nathan Maharaj and Ashleigh Gardner of Kobo where they will enumerate all the contractual and procedural reasons why ebooks are just not available for sale in markets they could reach. And then Kobo will join a panel conversation with Joe Mangan of Perseus and agent Brian Defiore to talk about why those barriers exist and what might be done in the future to remove them.

Oh, yes, there’s much much more: audience-centric (what I call “vertical”) publishing; the changing role of editors; the evolving author-publisher relationship; and a conversation about the “gamification” of children’s books. David Houle, the futurist and Sourcebook author who wowed the DBW 2012 audience, will return with his Sourcebooks editor, Stephanie Bowen, to discuss their version of “agile” publishing: getting audience feedback to chunks before publishing a whole book.

We will also do some stuff that is more purely “tech”. We have a panel on “Evolving Standards and Formats” discussing the costs and benefits of EPUB3 adoption, which will be moderated by Bill McCoy of IDPF. Our frequent collaborator Ted Hill will lead a discussion about “The New Publishing IT Department”. Bill Kasdorf of Apex will moderate a discussion about “Cross-Platform Challenges and Opportunities” which is about delivering content to new channels.

But purely tech is the exception at Digital Book World, not the rule.

And purely tech won’t show up at all at Authors Launch on Friday, January 18, the day after Digital Book World.

Authors Launch is what we think is the first all-day marketing seminar aimed squarely at authors with a publisher, not authors trying to work without one. It is pretty universally taken as a given that authors can do more than they ever have before to promote themselves and their books and that publishers should expect and encourage them to do that. But, beyond that, there is very little consensus. What should the publisher do and what should the author do? That question is going to be addressed, in many different ways, throughout the day.

The Authors Launch program covers developing an author brand, author involvement and support for their book’s launch, basic information about keyword search and SEO, use of metrics and analysis, a primer on media training, when and how to hire a publicist or other help, and a special session on making the best use of Goodreads. We’ll cover “audience-centric” marketing, teaching authors to think about their “vertical” — their market — and understand it.

The faculty for Authors Launch includes the most talented marketers and publicists helping authors today: Dan Blank, co-authors MJ Rose and Randy Susan Meyers, journalist Porter Anderson, David Wilk, Meryl Moss, Lucinda Blumenfeld, agent Jason Allen Ashlock, and former Random House digital marketer Pete McCarthy.

We have assembled a group of publishers and an agent to discuss how an author should select the best places to invest their time from the staggering array of choices. (Facebook, Twitter, YouTube, Pinterest, etcetera.) That panel will include agent Jennifer Weltz of The Naggar Agency as well as Matt Baldacci of Macmillan, Rachel Chou of Open Road, Rick Joyce of Perseus, and Kate Stark of Penguin. Matt Schwartz, VP, Director of Digital Marketing and Strategy for the Random House Publishing Group, will conduct the session on metrics.

A feature of both our Kids show on Tuesday and the Author show on Friday are opportunities for the audience to interact with the presenters in smaller groups so each person can get his or her own questions answered. At Kids we’ll do that at lunchtime, seating many of our presenters at tables with a sign carrying their name so our attendees can sit with them and engage. At Authors Launch, we’ll be conducting rounds of workshops, crafted so that the authors can get help in their own vertical (genre fiction, literary fiction, topical non-fiction, juvies, and so forth), and on the topics of greatest need for them.

We are sure the week of January 15-18 will prove to be an energizing and stimulating one for all of us living in the book publishing world. We hope you’ll join us.

Digital Book World Week | January 15-18, 2013

Children’s Publishing Goes Digital | Tuesday, January 15, McGraw-Hill Auditorium
DBW Pre-Conference Workshops | Tuesday, January 15, Hilton New York Hotel
Digital Book World Conference + Expo | January 16-17, Hilton New York Hotel
Authors Launch | Friday, January 18, Hilton New York Hotel

I am recently awakened to the importance of “platforms” in our dynamic digital publishing world. Some could say I’m slow on this one (and they’d be right). Perhaps it is the “to the man with a hammer everything looks like a nail” syndrome in action, but my belated awareness reminds me once again that the most important single concept publishers need to take on board to succeed in the digital future is “vertical”.

Here’s what woke me up.

We’re working on the Publishers Launch Kids conference on January 15, our second annual exploration of the world of children’s book publishing. We rapidly discovered three (there are more) propositions which create the environment within which kids  might well be encouraged by parents and teachers to read digitally.

Storia comes from Scholastic. They worked with 200 pilot teachers to build personalized reading experiences for each child: age-specific and with a personal bookshelf. The business model is individual title purchases; kids make “wish lists” and parents approve and enable the purchases. And there are tools to allow parents and teachers to track the kids’ reading.

RRKidz grew out of the successful TV series, Reading Rainbow, which was purchased by actor LeVar Burton and Hollywood producer Mark Wolfe. They robustly augment with video, use gamification to entice the kids to read more (badges for completion, for example), and provide a dashboard for parents to track the kids’ activity. Reading Rainbow works on a subscription model rather than individual purchase. They start you out with one free book but then go to an all-access model for $9.99 a month, or you can buy six months for $29.99.

And Magic Town is an international platform that also creates a controlled environment for kids reading. They push English language books all over the world, and offer a combination of a subscription and individual purchase model. They have different levels of engagement: “watch” (which is “read to me”), “play” (hot spots in the books with interactivity), “explore” (quizzes to test comprehension), and “read together” (stripping out the narrator so parent-child or early readers can do it themselves).

The light bulb that went on for me when we talked to these companies was that they were providing good and valid reasons for the gatekeepers for children’s reading to steer the kids over whom they have sway to one of them. To do all they can do, the platforms require some customization of the content. Storia would seem to have a head start in this platform competition because of the power of Scholastic’s reach and the enormous amount of content they already own, but all of these players have unique features.

And there are others building variations on this theme, including Ruckus and Capstone, the latter with more of an educational focus.

This provides a lot for publishers to be thinking about. Intuitively, one assumes the job of the publisher is to make the investments necessary to get their content onto all the platforms where it might sell, particularly if the customers there wouldn’t find or acquire it any other way. But it also means that the platform owner would control the audience and could, conceivably, not allow all competing content access. Or they could, over time as they gain a stronger hold on a larger audience, reduce the payments to outside content owners.

This raises a business challenge much like what we see as the problem (for publishers and authors) of subscription services. Subscription services might not have other characteristics of platforms (like providing metrics or context), but they “encourage” their subscribers to restrict their choice of content to what is provided within the service.

Both platforms and subscription services constitute a land grab, or, more precisely, a customer-control grab. Is it wise for publishers to allow their content to be used to strengthen the grip a gatekeeper has on an audience, whether or not they start out as a competitor? Whether or not it is wise, do publishers have any choice?

While I was pondering this, Kindle and NOOK both announced modifications of their own platforms to accomplish some of what Storia, RRKidz, and Magic Town are trying to do: get parents to see them as the preferred environment for their kids’ book consumption.

Kindle’s offer, called FreeTime, enables parents to manage the media access their kids have on the new Kindle Fire line. So they can specify 30 minutes of video, 30 minutes of games, and unlimited reading time (for example). That’s pretty powerful, and one can readily see parents choosing the Kindle platform just to get that capability. Kindle does this by allowing multiple accounts on one device and giving the parents that level of control on their kids’ accounts.

Barnes & Noble also now offers multiple accounts on the NOOK so a parent can have a naughty romance ebook and be sure that their kids won’t stumble across it while reading the material in their account.

Now sensitized to the power of the platform, I’m seeing more of it everywhere. B&N and Kobo have created tools for consumers to save treasured content and to enhance discovery. B&N calls their saving capability “scrapbooking”. Their new discovery capability, which they call “channels” uses humans (what a concept!) to create lists of “what to consider next” from various triggers (books, authors, subjects).

Kobo has tied the saving and discovery together in a very alluring way that, I must admit, makes me think about buying their new ARC device when it becomes available. What B&N calls “scrapbooking”, Kobo calls “tapestries”. You can “pin” (very much like the new web sensation Pinterest) digital items of interest — books, songs, web pages, whatever — together so they are visually nested for viewing. But what is really captivating is that ARC then runs a crawl along the bottom of the page with suggestions for other content that might interest you, based on what is in your tapestry. I am pondering a book idea; it seems to me that Kobo has just created a tool that could really help with the research.

That could provide me with a reason to buy their device and to use them regularly for content purchases. And that’s the point of a platform. Note that the capability only makes sense if it is applied to a vertical. The unique tool Kobo has built delivering automated search essentially looks for the people, places, and things suggested by the content in your tapestry. In other words, each reader creates his or her own verticals.

But it isn’t necessary to be a global retailer with devices, or even a children’s book specialist with an understanding of how kids learn and read, to apply the principal of vertical platforms. If a publisher thinks vertically — about niches — they can do it themselves. Dominique Raccah of Sourcebooks demonstrated that with the two new initiatives she just announced and which she explained at our Publishers Launch Conference at Frankfurt on October 8.

One of Raccah’s ideas is also a children’s book initiative. Called “Put Me in the Story”, it is a way to really enhance one of the most common parent-child experiences: reading a book together at bedtime. The capability Sourcebook announced takes a kids’ name and picture and inserts them inside a well-known children’s book presented digitally. Raccah wants to restrict the “Put Me in the Story” title base to well-known children’s books. Fortunately for her, Sourcebooks has had a number of big sellers in that genre recently so she can start with her own books.

But what really impressed me, and should make all publishers think, is Sourcebooks’ new “Shakesperience” line.

I did some acting in Shakespeare as a teenager. I always read the Washington Square Press Folger Library editions because they had the play’s text on the right-hand page and definition of terms and other notes on the left. I didn’t care if what was available from Penguin or Dell Laurel was cheaper or had a clearer typeface or was reputed to have a better introduction. I wanted the version that made the language of Shakespeare most accessible, and the Folger Library did that.

Sourcebooks has taken the idea of making reading Shakespeare easier and raised it to a new level using digital capabilities. They’ve added some audio and video, so you can hear and see how the pros do it. But what is most helpful is that they’ve taken the glossary idea and both extended and embedded it. They define individual words and phrases in context, and they put the definitions in so that you just mouse over what you want cleared up and get the definition in a little box. I spent some time with the Romeo and Juliet app — a play I know well — and found it really helpful.

Sourcebooks is starting with three plays (R&J, Hamlet, and Othello, which are apparently the three “most taught”) so this isn’t a platform yet, just the basis of one. But as they build out to the entire canon, it is conceivable that they will build a way to read Shakespeare that can establish itself as the one best way to do so. With a variety of community and informational features built around it (where every play is being performed, how different English teachers approach each play), there is a real possibility they can build a strong hold on franchise content that is in the public domain. That would really demonstrate the power of platform.

At the same Publishers Launch Conference in Frankfurt last week where Dominique Raccah talked about these two initiatives, we also heard from CEO Rebecca Smart of Osprey, a vertical publisher whose original niche was in military history. They have a dedicated audience of buffs with whom they communicate all the time. Smart, in an insight she credited to Seth Godin, said “I don’t look for audiences for my books. I look for books for my audience.” It is easy to imagine Osprey building a platform for readers of military history, with text and visual glossaries and other bells and whistles that make reading that content much more productive than reading it anywhere else.

This is an optimistic view of the future from a publisher’s perspective. What’s scary is the potential for one gatekeeper for all books. Many gatekeepers that are somehow vertical-specific — with overlaps, of course — is a much more cheerful prospect.

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.

 

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.

My eye was caught at the end of last week by a story in The Bookseller that acknowledged that ebooks just haven’t worked for illustrated books. It appears that the publishers of illustrated books they spoke to for the piece think that situation is temporary. The Managing Director of Thames & Hudson, Jamie Camplin, is quoted as saying “you have to make a very clear distinction between the situation now and the situation in five years time.” And Dorling Kindersley CEO John Duhigg emphasized that his team is being kept up to date with digital workflows and innovations, so they can “be there with the right product at the right time.”

But maybe, except for an opportunity that will arise here and there, for illustrated book publishers trying to exploit the same creative development across both print and digital, there won’t ever be a “right time”. There certainly is no guarantee there will be.

Duhigg characterized what he called “the black and white digital business” (but which I think would more accurately be described as “the immersive reading digital business”) as “flowing along” while admitting it is “very different” for the companies with “fully-illustrated lists”.

That’s accurate. Expecting that to change could well be wishful thinking.

Illustrated books in printed form depend on bookstores more than novels and biographies do. If the value in a book is in its visual presentation, then you might want to look at it before buying it, and the view you’d get of it online might not be doing justice to what you’d see if you held the book in your hands.

Camplin sees that optimistically. He has an aggressively modernist view of what will happen with novels. “I don’t see why print should survive at all for fiction, beyond the odd bibliophile” which he apparently believes could open up more bookstore display space for illustrated books.

But if the buyers of Patterson and Evanovich and 50 Shades of Gray aren’t visiting bookstores to make those purchases anymore, will there be any traffic to look at the illustrated books, however prominently they are displayed?

This problem has been nagging at me for a while. Books are illustrated for two reasons: beauty or explanatory purpose, more the latter than the former. When they’re illustrated to better explain, such as showing you how to knit a stitch or make a candle or a piece of jewelry, wouldn’t a video be a better option most of the time? If the illustration is a map, isn’t it likely that being able to manage overlays digitally (for the movement of the weather or the troops on the battlefield or the adjustment of borders over time) will deliver more clarity than whatever stills were in the book?

Of course, these things can be done by book publishers for the digital versions. But they require creating or licensing and then integrating new content assets and rethinking and redesigning the presentation. And that’s not even accounting for the work involved in adjusting the content to multiple screen sizes, a problem that just keeps getting more challenging as more different tablet and phone screen sizes are introduced.

One major publisher I know really endeavors to make ebooks of all their new title output, which includes some imprints that do a lot of illustrated books. Like everybody else, they frequently see ebook sales of 50% and more of their fiction, and 25% or more on immersive-reading non-fiction. But the illustrated books are in the single-digit percentages most of the time, with some of the more successful categories in the very low double-digits.

This is in the US — two years or more after the launch of the iPad and Nook Color and nearly a year after the launch of the Kindle Fire. Poor sales of illustrated ebooks can no longer be attributed to a lack of devices that can deliver them effectively.

And the ubiquity of these highly-capable devices brings its own new set of headaches. We were discussing the recent Bowker reporting that more people are reading ebooks on multi-function devices than on dedicated e-ink readers with our favorite expert on reading habit data, Peter Hildick-Smith of the Codex Group. He concurs and says that, as a result, the ebook consumption per reader threatens to go down.

Hildick-Smith points out that the tablet is a sea change in the history of content and consumption. Up until now, each content form had its own delivery mechanism. Records and cassettes and even MP3s were delivered through devices made just for them, just like the programming on TV and radio. Books on Kindles and Nooks replicated that paradigm. When you turned on your Kindle, you were as buried in your book as you were when it was in paper.

This is no longer true. If the book you’re reading on an iPad or Kindle Fire or Nexus 7 gets boring or you get tired of it, you can switch to a movie, The New York Times, your favorite song, or Angry Birds with the same device. Or the chime on your iPhone will ring taking you out of your book to answer an email.

For the publisher of novels, this means the book is competing with other media that would accomplish a different purpose. For the publisher of illustrated books, the book also must compete with media accomplishing the same purpose (how many new instructional videos of knitting stitches or jewelry-making techniques are posted to YouTube every day?) But they can’t do it for the same price, because that price is free.

So the illustrated book publisher not only has to learn how to make videos (a skill they were never previously required to possess), they also have to come up with a business model that enables their videos to be part of a priced commercial product, competing with legions of them that are free. And they have to finance a substantial creative component that isn’t contributing value to the print version at all.

We know our industry is changing radically. Different business models are challenged in different ways. Most of our time on this blog, perhaps too much of it, is spent contemplating how that affects the biggest publishers and the biggest books. There’s a reason for that. Big books have always driven the consumer book business and that seems to be more true than ever, not less.

But the challenge for — very specifically — “general illustrated book publishing” seems much more severe. The big publishers I’ve talked to apparently see that. Nobody has been explicit about it, but it sure feels like they can see a profitable path to navigate digital change with immersive reading books but not with illustrated ones.

I’ve also talked to mostly-illustrated publishers. Nobody says “you’re wrong, Mike. This is how we’re going to continue succeeding using our content-development skills, marketing capabilities, and talent network when bookstore shelf space is insignificant.” A couple of them have said “I don’t agree” without specifics. Most admit that they see the problem but haven’t yet figured out a solution.

There may not be one.

Camplin of Thames & Hudson is quoted at the end of The Bookseller piece saying, “I think it’s sort of a waste of money to assume the market is there [at the moment]; however, it would be foolish to say it will be this way forever.”

It might be equally foolish to say, or bet, that it won’t.

Of course, there is one strategy that can work: a vertical one. If you’re using illustrated book output to build a community of the interested, then you’ll presumably be able to sell them other things (software, live events, databases, services) when illustrated books are past their sell-by date. That’s the Osprey and F+W strategy and you can see sense in it because books are only part, and almost certainly a diminishing percentage, of their sales portfolio.

In fact, it is companies like these that might use technology like Ron Martinez’s Aerbook Maker tools and be able to use their books as a springboard to digital products with commercial value. They’ll probably also want to discover fotoLibra’s “advanceImages” scheme for micropayment of royalties instead of advance licensing fees for photographs. What Aerbook and fotoLibra offer can reduce the cost of creating an illustrated or enhanced ebook by 80%. That would certainly help.

It’s been obvious to me for a long time that managing the cost side of enhanced ebook creation is critical, which is why I was a sucker for the original Blio pitch in December of 2009.

For any publisher who claims a vertical strategy is their solution, the metrics to track are the sales they make of things other than books and the sales they make outside of bookstores. That is: track what is sustainable and has the potential to grow, not what is bound to shrink.

Relevant piece of anecdata: I remember being told by somebody at Wiley a couple of years ago that a large portfolio of photographs added measurable revenue on their travel sites. For very little cost, they could make a selection of photographs available for browsing. People clicked through them pulling up a new ad each time they did. That’s the “illustrated book publishing” of the future, but it starts with having the audience.

Another fledgling ebook retailing venture came through our office this month touting a subscription proposition. I told the entrepeneur “I’m skeptical of the subscription model for ebooks,” and he said, “I know”.

We had a great chat, but I’m still skeptical. When I say that, I mean I’m skeptical that a general offering subscription model can work.

There certainly is a logic to subscriptions, particularly for those who think the book business should learn from other content businesses. Cable TV really started with subscription and then only later moved to pay-per-view, which is more like the ebook sales model (but not exactly). We have Netflix for movies and TV, Audible for audiobooks, and a host of services for music, the most successful of which seems to be Spotify.

I have a Spotify subscription, even though I don’t use it much. Perhaps foolishly, I’m comfortable spending $119.88 a year (which is what $9.99 a month comes out to) to have access to just about any song I might ever want to hear instantly when the urge (or suggestion) to hear it arises. (Spotify very seldom disappoints me by not having the song.) And that’s even though most of my listening needs are satisfied with the 6,000 or so songs I have in my iTunes repository of which the best 1,000 are on my phone.

Spotify was cited by the entrepreneur I met as a motivation for him to start his ebook subscription business. As he correctly pointed out, “sharing a playlist” with a fellow Spotify subscriber enables them to immediately — with no additional cost or friction — “consume” that music. Sharing an iTunes playlist with somebody just leads them to having to make purchases which, quite aside from the money, put time and (a considerable) effort between receiving the playlist and enjoying it.

So, it is posited, this logic should apply to books. With a host of very explainable exceptions, I’m not sure it does, at least not anytime soon.

I’m fresh off a speech in Washington about what the DoJ doesn’t understand about publishing. The answer, if boiled down to a single word, would be “granularity”.

According to the MPAA, North American movie releases for 2007, 2008 and 2009, were 609, 633 and 558 respectively. There are foreign films and perhaps some below-the-radar indie films that must be added to that number to reckon what’s being made available, but it gives you an order of magnitude.

The Big Six publishers average more than 3,500 titles a year each. And there is far more production of titles beyond the Big Six in publishing than there is production of movies beyond the Hollywood studios. It would be very conservative to estimate that there are 100,000 new professionally-produced book titles a year intended for consumers. (Many more are published for professionals or as school or college texts and were you to add in self-published ebooks, which sometimes reach big audiences, they would multiply that number.)

Commercial releases of music would fall in between movies and books in number, but much closer to movies.

That’s the short answer as to why most people share music and movie experiences with far more friends and acquaintances than book experiences. It is also the short answer to why people outside the book business just can’t grasp it; each one of those books is a separate creative and commercial endeavor, down to having its own contract, its own development path and schedule, and its own marketing requirements.

(It also helps explain why many people who use libraries for some of their reading don’t use it for all. No library will have all the books a voracious patron would want to read.)

In the days before Amazon.com and digital books, there were two kinds of subscription services that worked for consumer books.

Book clubs offered price deals and curation (help with selection) but it was the price deals that really attracted members. Before ubiquitous bookstores (which arrived in the 1980s), Book-of-the-Month Club and The Literary Guild got the highest-profile books distributed to consumers who would have had a hard time getting to them (as well as those near bookstores who just wanted the convenience of mail delivery.) As bookstores spread, the Clubs found that “niche clubs” (around mysteries, science fiction, or subjects like gardening) were apparently more profitable than the big general interest clubs. (“Apparently” is a highly operative word, but the explanation of that will wait for another day.)

The other subscription concept that worked was the “continuity series”. The market leader there was Time-Life Books. These books were about a particular subject (World War II, say) and they were “packaged” specifically for the series and not available in stores. Continuity relied on the combination of intense subject interest and the “collection” mentality: somebody who started collecting the series didn’t want to have holes in their collection.

Both models were pretty much blown out of the water by online book purchasing which suddenly made every book available for home delivery to everybody everywhere.

In specific niches, subscription models can work very well. The granddaddy of them on the digital side is Safari Books Online, originally conceived and built by O’Reilly in partnership with Pearson. Safari serves a community of programmers and has a huge collection of instructional and reference books which they can use on the job. Most users of these books dip in and out of them, rather than reading them straight through. And they frequently like the idea of checking out what several books might say about a problem they’re tackling.

Safari pioneered the model of dividing the publishers’ share of the subscription fees by metering usage. The more your book is viewed, the more money you get from the pot. And since users of Safari will almost always find the answers they need within the service, leaving your book out means it won’t be found and used. Since at least some of the time Safari usage could lead to a sale of the book itself (even if not very often for most books), that discovery element is lost along with any Safari-generated revenue if the book isn’t included in the database. A publisher should feel pretty confident that they aren’t losing many sales being inside Safari.

(The model that looks like “all you want for a price” to the purchaser and like “pay per use” to the content owner in even purer form than Safari does it is the deal offered by Recorded Books for its digital downloading service for audiobooks to libraries. There are other subscription models in the library space; it is a distraction to the point of this post to get into them which is why they’re not covered here.)

O’Reilly saw at the beginning that their books alone wouldn’t be the strongest subscription offer so they were open to participation by others from the very beginning. Safari is exceptional in at least three ways: they are bigger than one publisher; they are built on a professional user base; and they deliver value primarily through chunks, not end-to-end reads.

But if a publisher is strong in a niche, a subscription service can work for them too: Baen Books (science fiction) and Harlequin (romance) are two niche publishers who have sold subscriptions successfully. (In fact, Harlequin recognizes sub-niches, further segmenting their audience for better subscription targeting.) The Osprey-owned sci-fi house, Angry Robot, offers subscriptions. eBooks by subscription are also part of the model for Dzanc, which does more literary books (fiction and non-fiction; they’re really less niche-y, except for “quality”) and it will be interesting if they can make the “quality” paradigm work the way “romance” and “science fiction” do.

Sourcebooks is a general trade publisher, but they have a robust romance list. They’re trying to establish a club and community called “Discover a New Love” which operates more like the old BOMC: subscribers can choose one of four featured titles each month in addition to getting other benefits from discounts on other books to early looks at some titles.

Subscriptions are offered in the children’s ebook area as well. Disney Digital Books has a monthly subscription service, as does Sesame Street eBooks. In both cases, the model is browser-based delivery rather than downloads.

F+W Media is a publisher that works across many verticals (niches). They had two big head starts. One is simply being vertical. They have audiences that are defined by their interest, which has been the key to making a subscription offer work in the book business. The other is that they were once publishers of magazines and operators of book clubs, so they have experience with direct customer contact and managing those relationships. They also had a lot of names. And F+W is managing subscription offerings for many things other than ebooks.

Most of F+W’s communities have been non-fiction (subject-specific) and they offer subscriptions for content in art, writing, and design. But they are also venturing into the romance market now and their Crimson Romance offer is an “all you can read” model. Baen introduces the wrinkle of releasing a novel in stages to subscribers, like a serial.

And we note in the recent reminder that the TED conferences started doing ebooks (sort of: only within an iOS app) that a subscription model is part of their thinking too. Once again: in a niche. The app that enables them to manage subscriptions is powered by The Atavist, which is another attempt to build a following for a publisher distinguishing itself by its content choices, like TED or Dzanc, rather than around already-established consumer clustering (romance, sci-fi, or a topic like writing or design.)

It is worth noting that there are “all you can eat” subscription offers and ones that are limited but which offer discounts on further purchases. That variation exists in other media too. Spotify is one price for everything; Audible and Netflix meter your use and you can pay more if you consume more.

There’s a pretty strong pattern here to the subscription offers we see.

They’re usually done by publishers. (Safari isn’t a publisher anymore, but it was started by publishers.) That means they’re working with the publishers’ margins (bigger than an aggregator’s margins). Controlling the product flow means they can make good use of intereaction with their audience, learning through data and conversation what they should be doing next. And, most important of all: from a product offer point-of-view, they’re focused.

They’re precisely the opposite of Spotify or Netflix or Audible who all want every single song, movie or TV show, or audiobook they can lay their hands on.

So, what about a more general model for ebooks?

It hasn’t happened yet and I don’t think it will anytime soon, despite the ambitions of my recent visitor. The challenges of putting together the title base for one are daunting and, as I hope this post makes clear, so is providing and demonstrating persuasive value.

I can see only one player that might be able to pull off a more general subscription offering in the near term. (You can guess who that is.) The “whys” of that will be the topic of a future post.

One thing that is pretty certain is that when there are many publishers offering subscriptions in their niches (and someday there will be), they’ll each be powered by a Cloud-based service of one kind or another. None will be asking the IT department to create the software to handle it.

I will admit that I haven’t programmed anything specific about “subscriptions” into the “Book Publishing in the Cloud” program we’re running on July 26, but if that’s what any attendee wants to find out, they’ll have a great opportunity at our “Conversations with an Expert” session to get the answers. Almost all of the speakers will be available during structured chat time, as well as representatives from the great companies that are sponsoring the event. 

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.