Rizzoli

Innovators and circumstances: the Frankfurt Publishers Launch show


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

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

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

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

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

Both sets of presentations are extremely diverse.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

 

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Learned (or figured out) at BEA 2012


BookExpo America, trade publishing’s industry-wide gathering, just completed what must be considered another successful year at Javits Center last week. Attendance was pretty much what it had been last year and the lines for autographs on the convention floor certainly gave off the feeling of enthusiasm and excitement that publishers want to see.

Convention roundups are best delivered by people like Laura Hazard Owen and my Publishers Launch partner, Michael Cader, who make a real effort to take in the breadth of what is going on. I, on the other hand, have my meetings and chats with friends that seem to fill up the days so my impression of the overall is just that: an impression. An ad hoc impression.

One thing that seems pretty clear is that my forecast for the future of BEA from 2009 was unduly pesssimistic. I like to get to what I think is the heart of the matter, but in this case I was overly simplistic. I got it right that bookstores would continue to decline but I got it wrong to think that would doom BEA within three or four years. Although other retailers stock books more than they used to, there are nowhere near the number of opportunities for publishers to talk to customers that there were even in 2009. But publishers are that much more interested in talking to any source of shelf space that they can and, in fact, non-book retailers often aren’t hit by the field sales forces.

So there continues to be sufficient reason for publishers to exhibit to keep them coming (albeit with smaller stands and less staff than the big guys used to bring). And that brings a whole slew of other players, including the ever evolving set of companies with digital propositions looking to get the attention of publishers large and small.

Aside from our Publishers Launch conference, which made lots of news and was an altogether satisfying event from an organizer’s perspective with a number of really fabulous presentations, I had a handful of takeaways from BEA 2012.

1. Metadata is still a mess. For a BEA panel outside Publishers Launch, we reunited the incredibly engaging team of Newlin and Toolan to discuss metadata. Bill Newlin of Avalon, a division of Perseus, and Fran Toolan, the “Chief Igniter” (CEO) of Firebrand Technologies, know it all about metadata and are both passionate and extremely entertaining in discussing it. I heard from somebody who saw the session or talked to them afterwards that they might be getting bored with presenting on the subject. I checked in with Bill afterwards and he said he just had to freshen up the presentation; it remained important and he wouldn’t stop.

Then I talked to Karina Luke, who had spoken about metadata for us in London last year when she was at Penguin and who now is in charge of Book Industry Communication (BIC), the BISG equivalent in the UK which has, among its responsibilities, the monitoring of industry complicance with metadata standards and certifying publishers for competence. “Is this really still a problem?” I asked her. “Yes.” “Even among the big publishers? Don’t they have it all straight?” “No.”

Since metadata has, as Karina makes clear, literally replaced catalogs and sales reps as the most important and mission-critical source of information about a publisher’s books, this is a bit shocking. We had Jonathan Nowell of Bookscan do a presentation at Pub Launch Frankfurt last year which demonstrated pretty emphatically the relationship between metadata and sales. He’s repeated the presentation, first for us at Digital Book World, and then under other auspices. Apparently not enough publishers have seen it.

2. Still, nobody reports selling illustrated books effectively as ebooks. I have asked the question over and over of every illustrated book publisher I know. One Big Six house that is doing ebooks for all the titles in one of their divisions with a lot of illustrated titles, told me that most of the time sales of the digital edition are in the single digit percentages of the total sale. Very successful illustrated ebooks might do 15% of the print sale. For immersive reading, that percentage is a big multiple of that.

Illustrated books as ebooks have not yet demonstrated that they will work in the marketplace.

3. Still, nobody reports a formula that can deliver repeated commercial success with enhanced ebooks. We all know about a few instances that have worked, but, so far, no publisher has come up with a formula to make enhanced ebooks commercially sound propositions.

We introduced Ron Martinez’s “Aerbook Maker”, a cloud-based technology that makes it easy to build complex ebooks and apps and cuts the cost of doing so dramatically. Martinez’s technology will definitely reduce the cost of experimentation and allow a lot more titles to hit the marketplace. Maybe that can jump-start a business both by making the costs go down and by making it easier for the creative people, including the author, to engage with the technology.

There certainly isn’t a business yet.

4. Publishers still haven’t focused on creating rights databases (which I identified as the biggest problem of the decade over a year ago.) This is a knotty problem for publishers. Sales of books are, in general, flat or down. Sales of rights, particularly in small bits and pieces (chunks), are going up. But without rights databases, the cost of those transactions can often eat the all revenue.

Exactly what to do is an extremely complex problem for any house to tackle and requires some high-level consideration, planning, and resource allocation. But I think it is obvious that the correction must begin with properly databasing the rights in current contracts as they are signed. Even this is apparently not happening yet in most places, according to the “support” industry that would help publishers change this.

Meanwhile, the “in” baskets in the permissions departments will continue to be piled higher and the number of unattended=to opportunities that might have been really remunerative or helped with the marketing of the book will be a subject to be considered at some future time.

(I recall now that my wife, Martha Moran, increased sales by some huge multiple in the 15 months she was doing special sales for Crown in the late 1970s. Her singular innovation was to create a set of form letters that allowed her to answer every request within a couple of days. The impact was immediate. It might well be the same when some publisher creates such a policy for its Rights and Permissions requests.)

5. The problems that distributors are facing with ebooks in the public library market are being duplicated in the K-12 library market. People in that space tell us that they suffer from the same concerns on the part of publishers that keep some players out of the public library market. Is there any way to offer ebooks in school libraries that won’t cannibalize sales of multiple copies in school settings? That’s as much a conundrum as the public library one, but it gets a lot less attention from the public or the publishers.

6. The slowdown in ebook share growth got a bit of conversation. Did I believe it was real? Sure, it is. And it is probably a very natural state of things. Before ebook reader prices plummeted, which they have really done in the past year or two, the readers only made real economic sense to people who read a lot of books. The first mover advantage Amazon gained with Kindle (which was the first device that was easy to load and also hooked up to a lot of titles) was huge because they self-selected the heaviest readers with their pricing. I’ve never seen figures that would prove it, but I’ll bet Nook also has found that ebooks sold per new device is declining from what they saw at first.

Another reason for this, besides the bias of heavy readers to be early adopters, is that so many devices being sold now are replacements. There is a tendency to “load up” on a new device. That’s not necessary on a replacement, particularly a replacement within the same retail ecosystem. So device sales have lost their power as a leading indicator of ebook share growth.

7. The most stimulating and exciting conversation I had at BEA was with Marcello Vena, the director of digital business at RCS Libri, a large book publishing group that owns Rizzoli and Fabbri Editori. RCS Libri is part of RCS Mediagroup, one of the largest EU media holding companies. They own a lot of media businesses including newspapers, magazines, radio, and online advertising.

RCS Libri is doing a large number of innovative things with ebooks, both illustrated and straight text. They’ve done an illustrated ebook on museums that has been a huge success in Italy and will be delivered in English by Rizzoli. They’re starting two new vertical imprints dedicated to genre series in Italian: Rizzoli Max for thrillers from Rizzoli and Fabbri Editori Life for romance novels from Fabbri Editori. All titles will be issued simulaneously as inexpensive hardcovers and ebooks starting this week. The initial list of the thriller series includes a book by my favorite self-published author, John Locke.

RCS is thinking globally and also innovating locally, including in the way they manage promotional pricing of their digital products online. Of course, what’s stimulating for me will probably be stimulating for an audience as well, so I’ve booked Marcello Vena to speak at the Publishers Launch Conference in Frankfurt on October 8.

I turned 65 during BEA. People older than I am are getting harder to find at industry events. But I really enjoyed seeing two of them at BEA.

Martin Levin is in his 90s. He went to law school after he retired from his publishing career, which concluded after he was chairman of Times Mirror Publishing, which then owned Abrams and New American Library. For the past two decades he has done M&A with the law firm Cowan, Liebowitz, and Latman. Martin greeted me with a big smile saying how happy he was that my career has gone so well. But he pointed out, accurately, “you’re not nearly as smart as your father.” Then he recalled some of Dad’s accomplishments, including putting in a vendor-managed inventory program at Doubleday in the 1950s.

Joe Friedman was a new sales rep at Doubleday when that program was instituted. He went on to a career leading sales at Penguin and then working for the ABA. He’s 76 now and hasn’t been in the business for a decade or more. He came in to Manhattan from Long Island on two separate days just “to see if anybody remembers” who he is. I was glad to see him. I wish I’d gotten his email address. I hope he found a few others with whom to discuss old times.

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