Seth Godin

Another wake-up call from Amazon as they serve author interests better than publishers have

The Authors Guild and its allies have recently appealed to the Department of Justice to investigate Amazon’s possible monopoly control of the book business. It is hard to quarrel with the fact that Amazon delivers more of the publishing output to consumers than any single account ever has and that they are, inevitably, changing the economics of the business as a result.

Although those fighting Amazon can and will point to what they consider to be situations where Amazon takes unfair advantage of its marketplace position, there are two aspects of what has transpired over the past 20 years that the critics who plead for government intervention will almost certainly ignore.

Most of Amazon’s success is due to their own stellar performance: innovating, investing, executing, and having a vision of what could happen as they grew.

Most of what Amazon has done to build their business — almost all of what they’ve done until the past few years of Kindle dominance — benefited most publishers and helped them grow their sales and their profitability. (In fact, book publishing uniquely among media businesses didn’t fall off a cliff in the decade surrounding the millenium and a strong case could be made that Amazon actually saved them.)

This has not stopped. The most recent example was announced yesterday. Amazon is now enabling readers to sign up on their favorite authors’ pages for notification of forthcoming books. This once again demonstrates Amazon’s willingness to innovate. And by doing this they also will deliver benefits to the publishers — an increase in out-of-the-box sales of new books to the authors’ sign-up lists. But the chances are that authors will be more appreciative than publishers will. That aspect of this initiative then feeds into the meme that “Amazon is taking over!”

In our digital marketing business, we often point out to publishers and authors that creating a robust and complete author page at Amazon should be a key element of any author’s digital footprint. It gets seen by a lot of people and it gets crawled by Google, enhancing Google’s understanding of who an author is and increasing the likelihood that they’ll be found through search, even searches that don’t include their name or their book titles. Looking at things from the publishers’ perspective as we tend to do on this blog, we’ve made the point that publishers need to encourage — or create — competent and well-SEOd author websites or risk having the Amazon author page. or even the book’s Amazon title page, become the highest-ranking return for a search for that author’s name.

When we talk about author websites, we stress the importance of building the fan base in size and intensity. Among the big literary agencies investing in helping authors with their digital presence (and many are), we helped one figure out the techniques to teach to help their authors gather mailing list names (or what Seth Godin called “permissions” for the first time about two decades ago when he was among the first to see the value in building email lists).

Now Amazon has, in their typical way (simple and self-serving) made this incredibly easy. We’ve met publishers who wonder why an author would need a website of their own rather than just a page on the publisher’s site. There are a lot of reasons that might be true, including many publishers’ apparent reluctance to “promote” the books an author has done with a prior publisher. But now publishers might hear authors asking the question a different way. Why do they need any author page on the Web besides the one they get from Amazon?

This topic is not new. Goodreads, which was bought by Amazon, has enabled fans to sign up with authors for years, a feature that was recently updated. So have some publishers, but too seldom in an effective way. They often put their author pages in silos — like a “catalogue” — that won’t get much traffic and less engagement. The author pages are incomplete. They don’t promote interactivity.

So there is still an answer to the author’s question: what else might they need? What Amazon has created doesn’t deliver true direct connection between authors and fans. In effect, the fans are signing up with Amazon — through the author’s branded page — for notifications that will come from Amazon. There is scant indication that there will be any further sharing of that author mailing list, or any other opportunities created for the author and the fan base to communicate (although “invited authors” may be able to create a personalized message to go with the announcement). But the single most important thing an author would want to tell his/her fans is “I’ve got a new book coming” and Amazon has handled that.

And in so doing, they have increased the control they have of the book marketplace and highlighted once again that part of the ground they take is ground the publishers simply cede to them. Any publisher that is not helping authors engage with their readers and actively create their own email lists to alert the interested to new books is put on notice now that they are quite late. But one thing is still true: better late than never.

Helping authors with their digital footprint needs to move up every publisher’s priority list.

An unrelated topic but another one in the news that is important is that the German ebook market seems to be going DRM-free. The latest announcement is that Holtzbrinck will take DRM off their ebooks in Germany. The last big holdout in that market is Random House, but one wonders for how much longer. Since two of the Big Five — Macmillan and Random House — are German-owned, it is fair to ask how long it will be before the experience there is reflected in what happens here. We’ll be watching closely to see whether there is any noticeable impact on sales as a result of DRM’s removal. Although Amazon permits DRM-free distribution to those who want it, we probably won’t see them pushing this option. There’s a case to be made that one of the principal effects of DRM today is that it protects Amazon’s ability to monopolize sales to the Kindle ecosystem they created.


Headliners galore will address Digital Book World 2015

Half of Digital Book World is delivered to the entire audience from the Main Stage. The speakers for 2015 comprise the most illustrious group we have ever had. The headine is definitely that we have managed to corral both Amazon and Apple speakers for our main stage — a feat we don’t believe any other conference in the book business has ever managed to pull off — but I’d be proud of this program even if neither of them were on it! Beyond the retailers, we have three bestselling authors, three leading publishing executives (four if you count that F+W CEO David Nussbaum will deliver a welcoming speech), three data-driven experts, and two leaders from adjacent industries.

The program will kick off with a presentation from best-selling author Walter Isaacson, whose current book is “The Innovators”. Isaacson wrote definitive bios of both Benjamin Franklin and Steve Jobs in recent years, both of whom had their own role to play in the book business. His current book really is about the digital revolution in general, the context in which publishing’s change, DBW’s topic, occurs. Context-setting is always a good way to start, and Isaacson definitely fills the bill.

We discovered ed-tech investor Matthew Greenfield during the course of planning DBW 2015 and we think our audience will agree he was a great “find”. Greenfield’s Rethink Education business invests in start-ups, which for ed-tech he divides into three groups of companies: those that deliver ebook readers and content for school use; those focused on short form reading, like news; and those that are writing-related, which are likely to include leveled collections of reading to help developing writers. Since the ed-tech field is largely about creating new platforms within which the content is consumed in schools and colleges (as well as adding value with context and evaluations), he will explicitly include advice for trade publishers who sell their content for educational use and will increasingly find it necessary to sell through these platforms. Greenfield also has some interesting speculation to offer about where educational technology is going and what we can expect to see from publishing’s biggest disruptor, Amazon.

You can’t be trying to figure out the future of publishing without being aware of the new phenomenon of “content marketing”. So I reached out to the Founder of the Content Marketing Institute, Joe Pulizzi, about imparting some wisdom to book publishers. I started out thinking the content marketing business might make use of some of our content, but he straightened me out pretty fast: that’s not the most likely synergy between what he knows and what we need. In fact, Pulizzi is an expert on how to use content to drive consumer engagement and he does it for organizations and brands that have to pay to create that content. Of course, we in the book business already have lots of content and ready access to more within our existing staffing and networks. In this presentation, Pulizzi will be talking about how we can use content to build consumer engagement and loyal customers to whom we can market repeatedly (vertical thinking). Everything Pulizzi says is likely to suggest questions to publishers, so we’ve also given him a breakout session to allow those who want to hear more and interact more to do so.

The first of our publishing CEOs to take the stage will be Linda Zecher from Houghton Mifflin Harcourt. Zecher runs a company that is very big in education publishing but has a top 10 general trade list as well, so she is really the only CEO managing across those two publishing segments. She’s also the rare publishing executive with a tech background (hers was at Microsoft). This interview with Michael Cader will focus on the lessons learned from the education side which could be harbingers of adjustments trade publishers will also have to make.

Next up will be James Robinson, Director, News Analytics, for The New York Times. Robinson is, effectively, the Times’s techie in the newsroom. He takes the view that writers and editors need to understand who their readers are, and, of course, they are not the same for every story. He also wants to make sure that as many people as possible see each relevant story, whether they would have expected it from The Times or not. If I do say so myself, Robinson has a sterling background. He spent several years working with me at The Idea Logical Company before he went on to get a Masters at NYU studying under thought leader Clay Shirky. The way he thinks about content and audiences for The Times contains lessons for non-fiction book publishers and perhaps for fiction publishers as well.

The first morning of Main Stage presentations will conclude with Cader and me interviewing Russ Grandinetti, SVP, Kindle, at Amazon. Grandinetti is a straightforward and outspoken executive who has been with Amazon since just about the very beginning and who has shepherded Kindle throughout its existence. With Amazon now generally acknowledged as the most powerful and disruptive force in the book business, we will all be interested to hear what he thinks is the future for printed books versus digital, bookstores versus online purchasing, and how much Amazon’s own publishing and subscription programs are likely to grow.

The second morning will begin with Michael Cader interviewing Internet and marketing guru Seth Godin on the subject of “what’s next?” Godin, who saw — and wrote about — the importance of building personal brands and mailing lists at the dawn of the Web era, is a successful book author who has been watching how publishers operate and market for several decades. In this conversation, he will deliver intuitive and logical advice that many can follow. Anybody who listened to Godin talk about “permission marketing” 20 years ago and followed his advice now has a massive emailing list that is a major marketing asset. Just about every publisher will likely come away from this session with some new ideas to apply.

Next up, for an interview with me, will be CEO Brian Murray of HarperCollins. Under Murray’s leadership, HarperCollins has established itself as the number two English-language trade publisher in the world. Two recent acquisitions, Christian publisher Thomas Nelson and romance publisher Harlequin, have given them strong foundations to develop large vertical communities. In addition, Harlequin had a global infrastructure in place that HarperCollins is using as a springboard to build out their own global — and beyond just English — presence. Murray will discuss how these acquisitions position HarperCollins strategically to compete with the substantially larger Penguin Random House and to build their ability to reach readers beyond those they get to through Amazon, Barnes & Noble, and an ever-smaller number of ever-larger retail trading partners.

Over the past several years, ebooks have taken market share from print that is probably in the range of 25 percent across the board. But that’s not distributed evenly by genre or subject or type of book. Jonathan Nowell, the CEO of Nielsen Book, is going to help us understand how the mix of what sells in print has changed as a result of this. Understanding what the evolving print marketplace really looks like willboth publishers and retailers plan for the ever-changing future, in which we will probably see less print overall, but not for everything.

Ken Auletta of The New Yorker has been covering both content and technology businesses for many decades. Nobody understands how the companies in both those industries work — including their cultures — better than he does. Among his five bestsellers is “Googled: The End of the World as We Know It”. Auletta will talk about “Publishing in World of Engineers” and how the smaller content companies cope with their new partners that come from the world of technology. The culture clash between long-established content providers and techies who place high value on “disruption” is a theme we all deal with and about which Auletta can shed real light.

Hilary Mason is a data expert who has honed her talent for analytics during a stint at Mason has spent years learning about individuals through their online behavior. In this talk, she is going to tell publishers what she’s learned about how to gain insight into individuals and audiences and how to use those insights to garner interest and affect behavior. Like Pulizzi, we anticipate that Mason will raise a lot of points some of our attendees will want to pursue further around their particular interests. So we have also given her a break-out session in the afternoon, where the most interested can explore further how to use data and analytics effectively.

Judith Curr is President and Publisher of Simon & Schuster’s Atria imprint. She has always had an admiration for entrepreneurship and indie authors have looked attractive to her as a publisher for a long time. (She points out that Vince Flynn started out as a self-published author.) So Curr did some brainstorming and tried to figure out how to make her imprint a place that an indie author would want to be. In this talk, other publishers who see the importance of appealing to authors who want to market themselves, manage their careers, and publish faster (or shorter) than the conventional process, can learn from her thinking, insight, and experience.

Our main stage activity will conclude with an interview by Michael Cader with Keith Moerer, who runs Apple’s iBooks Store. iBooks Store has established itself as the second leading global seller of ebooks and has ambitious plans for continued growth. We’ve never had the good fortune to have them on the DBW program before. We are thrilled to be able to close our main stage day with Amazon and our second with Apple, giving publishers a chance to hear from the two biggest retailers in the world for their ebooks.

Not covered in this post or my prior post about the DBW breakout sessions is the sterling Launch Kids program organized by our friend and frequent collaborator, Lorraine Shanley of Market Partners International. The world of juvie and YA publishing will probably change the most of all publishing segments and there are legions of players outside what we think of the book business working on it. Lorraine has corralled a number of them — familiar names like Google, Alloy, Wattpad, and NewsCorp’s Amplify and innovators such as Kickstarter, Speakaboos, Paper Lantern Lit, I See Me, and Sourcebooks’s new smash success, Put Me In The Story. If publishing for young people is on your radar, you’ll want to plan for three days with us and start with Launch Kids the day before DBW 2015 begins.

Through the comments section of this blog, I got to know Rick Chapman, who is the self-published author of books on software (and, now, also some fiction.) Chapman’s comments on the blog were so insightful that I recruited him to speak on a panel at DBW (covered in the last post). Yesterday, Rick published this piece challenging the conventional wisdom that Amazon is the indie author’s best friend. He has even started a survey of indie authors to gather data for his DBW appearance. Whatever position one takes on Amazon, Chapman’s post is thought-provoking and entertaining. If you read this, you’re likely to want to see him when he speaks on a panel at DBW.


The Digital Book World program this year covers the waterfront of the digital transition for book publishing

(This is a longer-than-usual Shatzkin Files post reviewing the topics and speakers for the 26 breakout sessions at DBW 2015. It serves as a checklist of “things to think about right now” for book publishers living through the experience of digital change. The entire program is here. We decided not to link to each and every speaker.)

The main stage speakers get most of the promotional attention leading up to Digital Book World. That’s just good marketing because there are many important names. Some have written big books (in addition to many other things they’ve done) like Ken Auletta, Seth Godin, and Walter Isaacson. We have a number of CEOs on the main stage as well, including Brian Murray of HarperCollins, who has just been named PW’s “Person of the Year”.

But half of Digital Book World is the six breakout session slots, at which attendees select from several choices. I take some pride in saying that we’re requiring some of the toughest decisions our attendees will have to make in 2015 very early in the year when they decide for each slot which session to attend and which ones they have to skip.

What we tried to do was to schedule things so that our “tracks” — two or more sessions on marketing, data, global, transformation, kids/education, technology, and new business models — are set up to allow people to attend all the sessions in that track. But there is overlap, of course.

“Marketing” is definitely the marquee subject for DBW 2015. We have seven sessions under that heading. On the first day we have a conversation about the skill sets required for marketing today, chaired by my Logical Marketing partner Pete McCarthy and featuring Jeff Dodes of Macmillan, Angela Tribelli of HarperCollins, Rick Joyce of Perseus, and Hannah Harlow of Houghton Mifflin Harcourt. Since two of the panelists are recent imports from outside publishing, presumably hired precisely because they had skill sets that publishing training wouldn’t have produced, this group is bound to help all publishing marketers identify what they need to bring on board.

That will be followed by a session on Smarter Video Marketing, which will be chaired by Intelligent Television founder Peter Kaufman, leading a discussion among video marketers Scott Mebus of Fast Company, Sue Fleming of Simon & Schuster,  Heidi Vincent of National Geographic Books, and John Clinton of Penguin Random House. In a world where authors are making their own videos and YouTube is the second leading search engine, this is a topic that suddenly needs to be on everybody’s radar.

The third marketing track session on Day One is on mobile marketing. Since tracking data is now showing that people now do more searching on mobile devices than on PCs, making sure books are optimized for mobile discovery has rapidly become essential. Thad McIlroy, a consultant with a long history in publishing, did a report on mobile for Digital Book World and will present some of his findings to kick off the session. Then he will lead a discussion including Nathan Maharaj of Kobo, Kristin Fassler of Penguin Random House, and CJ Alvarado of Snippet, a reading app that has been specializing in creating mobile reading experiences for branded authors/musicians /personalities, to detail how publishers and retailers are responding to this new reality.

Also related to marketing and also running on Monday, we’ve set up a break-out session for Joe Pulizzi, head of the Content Marketing Institute, who will have done a presentation on the main stage. Content marketing is something publishers need to learn from. Certainly all the techniques that are employed by non-publishers to market themselves with content created for a marketing purpose should be employed by publishers who have tons of content available for marketing. Pulizzi knows all the tricks and will have talked about many of them from the main stage. The breakout session will give attendees that want to learn more, and ask questions, an opportunity to do that.

The marketing track continues on DBW’s second day. One session, being moderated by my Idea Logical colleague, Jess Johns, will examine case studies of successful marketing campaigns. We’re featuring representatives from two of the platforms publishers can work with for marketing: Ashleigh Gardner of content platform Wattpad and Alex White from marketing data aggregator Next Big Book. They’ll each be joined by a publisher who has worked with them (about to be announced). Wattpad and Next Big Book, along with their publisher partner, will walk through what they’ve done in marketing that would have been impossible to imagine a couple of years ago.

Also on Day 2, we’ll be examining the new world of digital paid media. This has been a big challenge for publishers. Digital media is apparently cheap; you can do marketing that matters for hundreds of dollars in “media” cost, it doesn’t require thousands. But there’s also a lot of work and management involved to using digital media right. We were glad to get digital marketers from three leading publishers, Alyson Forbes from Hachette, Caitlin Friedman from Scholastic and Christine Hung from Penguin Random House as well as Tom Thompson from Verso Advertising. This session will be moderated by Heather Myers of Spark No. 9.

A marketing topic that has become top-of-mind for many publishing marketers is “price promotion”. A business has been built around it for the ebook business called BookBub, and its founder and CEO Josh Schanker will be on our panel discussing it. He’ll be joined by Matthew Cavnar of Vook, Rachel Chou of Open Road, and Nathan Maharaj of Kobo. We went for three retailers and service providers here because publisher experience with price promotion is still pretty limited, although the ebook pioneers at Open Road are an exception. Laura Hazard Owen of GigaOm will moderate this session.

Our data conversation begins on the main stage on the second morning of DBW with data scientist Hilary Mason, the CEO and Founder of Fast Forward labs. She started looking at Big Data at, the link-shortening and -tracking service. Mason is going to look at data across a content set that is the only one more granular than books: the content on the web. Her presentation will help us all understand how to interpret audiences for very small portions of the available content. Because we expect her presentation, like Pulizzi’s on Day One, to generate lots of questions, we also gave her a breakout session to facilitate questions and further explanations. DBW sponsor LibreDigital, which has a new offering to help their client publishers turn data into business intelligence, will help Hilary manage the Q&A.

Our panel on “Authors Facing the Industry” will be prefaced by two presentations.. Judith Curr, president and publisher of Simon & Schuster’s Atria Publishing Group, will have done a main stage presentation on the choice “self-publish or be published” that authors face. Then the breakout session will begin with a short presentation from Queens College Professor Dana Beth Weinberg of DBW’s annual “author survey”, giving a data-grounded underpinning to the panel discussion that will follow. Bianca D’Arc, an extremely successful writer of paranormal sci-fi and fantasy romance (and a former chemist), will be joined by two non-fiction writers for this conversation. Both David Vinjamuri, a marketing professor, and Rick Chapman, a computer programmer, have marketed their books themselves because they make more money doing it that way to their highly-targeted audiences. The panel will be moderated by Jane Friedman, one of the industry’s thought leaders about self-publishing.

The data we’ve never had before that is just beginning to be appreciated is the subject of our “How People Read” panel. It has become obvious that the platform owners know more about how consumers “behave in the wild” around reading than publishers do. Multiple device use, response to free samples, whether people read more than one book at a time, and how fast they read various books are all clear to those who serve up the ebooks, as well as differences in behavior that are geographically based, including uptake of English-language ebook reading. In a panel which will be moderated by Chris Kennealley of Copyright Clearance Center, Micah Bowers of Bluefire, Michael Tamblyn of Kobo, Jared Friedman of Scribd, and David Burleigh of Overdrive will share data insights their companies have gained by seeing many consumers of many genres in many contexts. Evan Schnittman, who had senior executive positions with Oxford and Bloomsbury and most recently with Hachette, will be moderating.

Of course, that last session is not just about “data”, it is also about “global”, which is another track at DBW 2015 with two sessions on Day Two.

The first of these, moderated by BISG Executive Director Len Vlahos, is on “Global Publishing Tactics”, designed to help publishers know what to do to sell outside their home territory. Speakers from three companies that provide global ebook distribution — Gareth Cuddy of ePub Direct, Marcus Woodburn of Ingram, and Amanda Edmonds of Google — will talk about what it takes to make your ebooks discoverable and get them purchased outside your home market. All of these entities distribute to just about every market in the world on behalf of a wide variety of publishers large and small. They see what works in metadata, pricing, and marketing, and they know what doesn’t. They are in a unique position to help publishers hoping to expand their global sales know what it will take to do that.

Our other dedicated global track session is the “Global Market Spotlight”, which will help our US- and English-centric audience understand the opportunities in four of the biggest emerging digital markets. It will feature local experts Carlo Carrenho from Brazil, Thomas Minkus of the Frankfurt Book Fair speaking about Germany, Marcello Vena from Italy, and Simon Dunlop of Bookmate, the ebook subscription service from Russia. Following a general introduction about how to look at new markets from Gareth Cuddy of ePub Direct, each of them will talk about how both online and ebooks are taking hold in their market, what local competitors are doing (and there is a very interesting ebook competitor coming from Germany), and what the prospects are for English-language sales in their market. This session will give very directed advice to publishers trying to get sales in four of the most promising new digital territories in the world.

Education is a subject on the agenda for trade publishers because how their books will get to students is undergoing dramatic change they’ll need to understand.

College textbook publishing has been remade in the past decade. In a panel moderated by veteran industry executive Joe Esposito, we will have the four giants of college textbook publishing talk about what that has meant in each of their shops. Simon Allen of Macmillan, Ken Brooks of McGraw-Hill, Clancy Marshall of Pearson, and Paul Labay of Wiley will discuss how their businesses have changed over the past few years, and why. Each of the biggest college publishers has changed their organizational structure, their workflows, and even their products themselves in the past decade, sometimes responding to and sometimes anticipating the changes taking place in the market. All of them have essentially switched from selling textbooks to selling learning platforms. Publishers that sell content into the college market will want to understand the new platforms these players have created and how outside content will now make its way to this market.

The school market is also undergoing extreme change. Partly spurred by the new Common Core standards but also by the fact that digital devices are increasingly integrated into the lives of today’s youth, the classroom experience is being changed dramatically. Neal Goff, who has had senior executive positions in several companies, most recently My Weekly Reader, and who is currently consulting with Highlights, will moderate the discussion about the changing K-12 environment. Three companies with very different perspectives on the market will participate. Chris Palma of Google will describe the operating system that works on the district, building, and classroom level that Google is making available free to school systems, achieving remarkable penetration very quickly. Of course, Google also provides hardware (Chromebooks) and content (through Google Play). Neil Jaffe is the CEO of Booksource, which has been providing print and digital content to schools for many years and sees a continuing need to provide both in the future. And Erica Lazzaro speaks for Overdrive, the company that has dominated the ebook library lending business and is making its way in the school market through its penetration of school libraries. They each have a unique view of how this market is changing. Publishers who sell books read by K-12 students will find this session invaluable.

It is becoming increasingly understood that “gamification” is a way to engage a lot of people who might choose non-reading content, particularly potential readers among the young. Our panel on this subject includes two publishers that are using gamifying to create more engaged “readers”. Keith Fretz will speak for Scholastic, which has made this work more than once already, most notably with “39 Clues”. He is being joined by Greg Ferguson of Full Fathom Five, a collaboration created by James Frey among HarperCollins, Fox, and Google’s Niantic Labs. Another way to employ gamification to engage younger readers is being employed by panelist Thomas Leliveld of Blloon, a subscription ebook service that uses “virtual money” both to reward its users and for them to use to pay for what they read. Also on the panel will be Sara Ittelson, Director of Business Development at Knewton, an adaptive learning company that has developed a platform to personalize educational content and which has lots of data showing how students engage with educational content across ages. This session is moderated by publishing attorney Dev Chatillon.

You could call it “education” or you could call it “tech” (another one of our tracks), but either way DBW attendees will learn about some important new propositions on our Publishers Launchpad session on ed-tech. Our Launchpad sessions are moderated by Robin Warner, a tech investor through her role as Managing Director of Dasilva & Phillips. Launchpad seeks to feature companies that many won’t yet have heard about, but we think they should. Johnjoe Farragher, CEO and Founder of Defined Learning has a new approach to mapping skills to curriculum for the K-12 market. Neal Shenoy, CEO of Speakaboos, will explain his subscription platform for digital picture books which is pedagogically designed to promote education. And Jason Singer, CEO of Curriculet, will explain how his company provides a rental model combined with enabling teachers to annotate and structure the student experience. All of these companies effectively become “gatekeepers” for trade content in schools, making their models very important for publishers who want their books delivered to K-12 students to understand.

The other Launchpad session, also moderated by Robin Warner, is more clearly “tech”-centric. Kevin Franco, the CEO of Enthrill, will talk about how his company “makes ebooks physical” by the use of cards with codes, which is now being trialed in Wal-mart in Canada. Peter Hudson of BitLit enables publishers to provide a free or discounted ebook to people who own a print copy and, along the way, has also developed a really nifty technology that will identify the books on anybody’s shelf from a picture (which they call a “shelfie”). Andrew Dorward of BookGenie451, will explain how his company uses semantic search to make books more discoverable. Beni Rachmanov of DBW sponsor iShook, which has a social ebook reading platform for readers, authors, and publishers, will also present at this session.

Following the Launchpad session, we have our techiest session, moderated by my personal “go-to” guy for understanding tech development in book publishing, Bill Kasdorf, Vice-President at Apex Content Solutions. Bill’s panel’s topic is what might be thought of publishing tech’s “magic bullet”: HTML 5, a format that enables the nirvana of “write-once, use-many-ways” content creation. With the need to manage both print and digital formats and with digital now being rendered on what seems like an infinite variety of screens, the need for publishers to make use of this technology has never been greater. The panelists will include Bill McCoy, head of the International Digital Publishing Forum, and publisher practitioners Phil Madans and Dave Cramer of Hachette Book Group USA, Paul Belfanti of Pearson, and Sanders Kleinfeld of O’Reilly.

Because DBW is relentlessly “practical”, we don’t program much that is far from the current commercial mainstream. An exception this year is our “Blue Sky in the eBook World” panel, which will feature three perspectives that are clearly pushing the envelope beyond where we are today. Chris Kubica and Ashley Gordon have been convening a lot of industry thinkers around the invention of a new kind of bookstore, the publishers’ “dream” to compete with Amazon. They’ll be describing what they and their co-brainstormers have come up with. Peter Meyers, until recently at Citia, is author of “Breaking the Page” and the industry’s leading thinker about how straight-text ebooks can be improved. He’ll put forth his thoughts on that. Paul Cameron is the CEO of Booktracks, a company which puts sound tracks to ebooks and has evidence that the music along with the text improves recall and comprehension. All of these propositions are not (yet) commercially employed, but for DBW attendees who might be looking for the big things AFTER the next big thing, this is the session that will talk about those possibilities. This session is moderated by Professor John B. Thompson, author of “Books in the Digital Age” and “Merchants of Culture”.

Although what the educational publishers are doing might also qualify, we have a track dedicated to “transformation” that has three distinct groups of panelists, each demonstrating how radical change can occur in different ways.

The session on “building the trade publisher of the future” focuses on companies that are remaking themselves from what they were before. Carolyn Pittis, now Managing Director of Welman Digital and formerly on the cutting edge of change management with HarperCollins for over two decades, will moderate. We are proud to be the first industry event to host Daniel Houghton, the new CEO of Lonely Planet, a several-decades old travel book publisher, founded as an upstart, and now rethinking its publishing role in a very challenging travel book market. Lucas Wittman is at ReganArts, Judith Regan’s start-up venture which has an entirely different literary character than the art book publisher she’s working within, Phaidon. Andrea Fleck-Nisbet of Workman is in a company that has just reorganized to be better positioned for change. And Sara Domville, President of F+W (owners of Digital Book World), will describe the experience of turning a “book and magazine publisher” into a “content and commerce company” with a diminishing footprint in print and a growing dependence on ecommerce.

We aren’t neglecting publishing start-ups that are really entirely new propositions as well. Lorraine Shanley of Market Partners will moderate a session bringing together a few of them. Liz Pelletier is the publisher of Entangled, a publisher with new economics that rewards the service providers that support authors as partners in the projects they work on. Georgia McBride is the proprietor of Georgia McBride Media Group, a lean publishing start-up that is developing its properties for multiple media, not just books, taking advantage of her background in music and Hollywood. Jason Pinter of Polis Books is a bestselling thriller writer and has worked for a number of publishers (St. Martin’s, RH, Grove Atlantic, Warner Books) before he founded this digital-first genre book publisher with high author royalties (beginning at 40% of net) against advances. And Atria executive Peter Borland heads up an in-house start-up, Keywords Press, which seeks to leverage YouTube fame into bestsellers with the nurturing of an experienced publishing team.

But it isn’t just book publishers and entrepreneurs who are capitalizing on the digital transition. Former editor Jeremy Greenfield, now with The Street, will moderate a session of media companies using digital as an opportunity to change their business models. Sometimes ebooks are very important to this effort and sometimes not so much so. The speakers in this session are Mike Perlis, the President of Forbes, Lynda Hammes, the publisher of Foreign Affairs magazine, Jay Lauf, President and Publisher, Quartz (The Atlantic), and Kerry Dyer, Publisher and Chief Advertising Officer of U.S. News & World Report. The tactics being employed by these three media companies to take advantage of their content and their audiences are harbingers of what all non-book media will be thinking about and doing in the years to come. Publishers can find new collaborators in their ranks, or they’ll be facing these entities as new competitors.

The sessions in the track we call “transformation” are also really about “new business models”. But we have two sessions that are more strictly about publishers exploring new business models.

One of these is on “publishers selling direct”, something that made very little sense for any but the nichiest publishers before the digital era. Dominique Raccah, the founder and CEO of Sourcebooks, pointed out to me that I needed that session (she surely was right!) and will appear on it. She’ll be joined by Eve Bridge from F+W Media, Mary Cummings of Diversion, and Chantal Restivo-Alessi of HarperCollins, the biggest of the publishers to aggressively pursue the direct sales option. The panel will be moderated by industry consultant David Wilk.

Publishers are also exploring new business models with their attention to “verticals”, audience-centric marketing that sticks to a topic in ways that might ultimately allow selling things other than books. This is also a big subject for DBW’s owner, F+W Media, and Phil Sexton, who runs their Writer’s Digest community, will speak about it. Mary Ann Naples, SVP and Publisher at Rodale, Adrian Norman, VP Marketing and New Products at Simon & Schuster, and Eric Shanfelt, Senior VP, eMedia, of HarperCollins Christian Publishing, show us that both specialist and general trade publishers are investing in building these enduring audience connections. Ed Nowatka of Publishing Perspectives moderates this conversation.

There are two panels that will be among the best-attended of all, but which don’t fit comfortably under any of the track headings.

Probably the two most-discussed digital change issues in 2014 have been subscriptions for ebooks and Amazon. We’re pleased to have breakout sessions on each that should really shed some new light on topics that have already been the subject of much conversation.

The subscription conversation will be moderated by Ted Hill, who co-authored a White Paper on subscription for Book Industry Study Group early in 2014 which has looked increasingly prescient as the year has gone along. The session will begin with a brief presentation by Jonathan Stolper of Nielsen Bookscan, who will deliver data from Nielsen’s recent research into subscription sales. Hill will be joined by the two biggest players in ebook subscription, Matt Shatz of Oyster and Andrew Weinstein of Scribd, to describe how their companies have fared building this new model in 2014. He will also have two publishers with books in those services, Doug Stambaugh of Simon & Schuster and Steve Zacharius of Kensington, to talk about how it is going from the publishers’ point of view. As a bonus, Zacharius also has real sales experience with Amazon’s new subscription service, Kindle Unlimited. This will be most people’s first opportunity to get a wide-ranging view of how the subscription model is really working in the marketplace for the subscription services and the publishers themselves.

And, finally, we’ll have an Amazon conversation that is extremely timely against the backdrop of a year when contentious relationships between Amazon and their publisher-suppliers became a matter of public record. Our discussion is on the subject “Can Amazon Be Constrained? And Should They Be?” and it is moderated by Ken Auletta of The New Yorker, a journalist with several decades of experience tracking both media and tech. (Auletta will be appearing earlier that day on the main stage.) He will be talking with Barry Lynn, a scholar at the New America Foundation, who has recently proposed that Amazon be investigated for anti-trust; journalist Annie Lowrey of New York Magazine, who has expressed skepticism about whether the anti-trust rubric fits; and Amazon and indie author Barry Eisler, who has been a full-throated supporter of Amazon’s position against the major publishers. No conference has ever presented such a balanced and provocative conversation about Amazon before; we’re proud it is taking place on the DBW stage.

So there’s a lot to choose from at DBW 2015. We probably won’t settle all the questions around where book publishing is going in the future, but we’re certainly providing engaged conversation about the issues that matter most. And remember after you read this: the highest-profile speakers are mostly not mentioned. We’ll talk about them in a later post about what’s taking place on the main stage.

PS: The last Early Bird discount for Digital Book World expires on Monday, December 15. Save money by registering now!


Capturing and distributing video might be getting cheaper than capturing and distributing words

There has always been a hierarchy of media built around how easy or cheap it was to deliver one versus another. The most simplistic expression of this has always been that words are cheap and moving images are expensive. A writer could create the intellectual core of a book on her own with paper and a writing implement. Making a movie required a number of creative skills and people and coordination.

Two decades ago, before online distribution and consumption, the hierarchy of ease and cost extended to the commercialization. Book publishers had much lower capital barriers to jump to put a product into the market than movie producers. TV producers required access to infrastructure which was controlled by a very limited number of gatekeepers (even after cable TV expanded the number of channels).

Music occupied an in-between position. A singer with a guitar could make an acceptable recording by oneself pretty readily. Recording a band well was more complicated. Recording an orchestra — even getting an orchestra to play — was expensive.

As the Internet evolved, bandwidth limitations confirmed the hierarchy. Text and music required little bandwidth; video required a lot.

The evolution of devices confirmed it as well. Until recently, texting was all phones could really do besides delivering sound. The Kindle, delivering pretty-much text-only with some weak gray-scale illustrations, preceeded the iPhone and iPad. And, in fact, straight text was demonstrably easier to digitally deliver than more complex layouts like charts with columns or recipes with complex graphic design requirement.

So for the first decade-plus of the digital delivery revolution (if you date it from the early or mid-1990s), straight text had built-in advantages. One person could create it. The bandwidth required to download it was ubiquitously available long before broadband was widespread. The devices could display it in a way that was comparable to the legacy print-on-paper.

When devices and bandwidth improved so that delivering video to masses became commercially viable, publishers smelled that consumers would want video and started to “enhance” ebooks, particularly with video. Studios to enable this were built in some big publishing houses. But (as the tech geeks say) “the dogs didn’t eat the dog food” and we’re already in a period of retreat from video as an important component of publisher’s product creation. (Although, clearly, publishers still see value in videos for marketing and promotion.)

But it may be that video’s disruption of print is just beginning. What used to be the hardest and most expensive media form to create and distribute may have become the easiest and cheapest. This is important when you consider that so many aspects of illustrated books are a “compromise”. You show a knitting stitch or a technique for making a piece of jewelry as six still pictures with captions in a printed book because video wasn’t possible. When the IP that serves the same purpose is “born digital”, you’d almost certainly reinvent the definition of a “book”.

Think about it this way. A 4-year old with an iPhone could conceivably shoot a video that could be a big hit on YouTube. (Maybe one already has.) There’s no way a 4-year old could write a story that masses would want to read. With bandwidth and suitable device ubiquity no longer any sort of constraint at all, the great commercial advantage of words on a flat surface is melting away. This is bound to be disruptive to both the book and movie-TV industries in ways that are not evident to us yet.

(Although some of the disruption is already evident.  Online video consumption is eating into TV viewership. An Accenture study suggests that traditional broadcasters are having some success fighting back the trend.

The disruption from YouTube (not to mention the Hulu/Netflix) of movies and TV is pretty evident, and the meme of “fighting for eyeballs/screen time” is ubiquitous, e.g. media companies are increasingly viewing other types of media as competition — books vs games vs online video vs TV vs film. The shift is already raising questions both of how to keep people coming back to books (rather than going off to other media) and of how to use the new technology itself to sell more books.

I saw one example of how the ease of making video could change things profoundly earlier today when serial entrepreneur Susan Danziger showed us her latest invention, a service called Ziggeo. It’s pretty simple but extremely useful. Ziggeo is an environment where webcam videos that can be shot from just about any computer or smartphone can be requested and curated. The “problem being solved” was for people screening job candidates, potential roommates, or potential dates to have a much more articulated impression of the person they were “meeting” than words and a still picture can provide. That’s a real problem that affects a lot of people.

But we readily saw applications for event organizers like us (being able to see an aspiring speaker “in action”, getting our speakers to blurb for promotion) and for book publishing promotion (author pitches, publisher pitches to individual stores). The simple intuitive interface would also put video-making power in authors’ hands. Imagine a non-fiction book with video interviews embedded. You might not actually have to imagine this very much longer. Using Ziggeo, it would be a piece of cake for an author to go back to an interview subject by email with a series of questions and get the person to give them appropriate video to slot into the books. With or without Ziggeo, I think the chances are you’ll be seeing that happen pretty soon. Ziggeo would make it a lot easier.

I’m not the first book business guy to discover this nifty new application. Seth Godin has already blogged about it, focusing on the “interviewing” problem Susan set out to solve in the first place. But Ziggeo is the most current demonstration that the structural advantage that “just words” had among all media is a thing of the past. The cultural implications are profound, as is the potential impact on the book business.


“Platforms” are not exclusively the purview of Kindle, NOOK, and other retailers

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.

There are a lot of platforms and nods to platforms not included in this piece, which is trying to make a fairly narrow point. There are educational platforms like Blackboard, Moodle, and WebCT that are trying to control access to students in schools. (Ingram’s “Vital Source” digital textbook capability has joined forces with Blackboard to increase its power and relevance.)

At our Frankfurt conference, Pottermore CEO Charlie Redmayne made it clear that the platform capabilities they have built will be made available to other big brands.

There are applications that go in this direction in genre publishing. The AllRomanceEbooks web site isn’t a romance platform, but it could be the start of one. When HarperCollins announced (yesterday) that they were launching DRM-free and social reading capability for their romance line, they teamed up with AllRomance to do it. That’s platform-“like”.

The point is that it’s not just about the content itself; it’s also about the ancillary value the platform can add; it’s about the format/wrapper/technology that supports the objectives of the audience for that content.

Nobody has created a total genre “platform” per se yet. AllRomance adds value to the shopping/retail experience. Tor creates a place to talk and learn about new books. Baen has a subscription service. But none (that I know of) are adding sufficient context to the reading/consumption experience itself to qualify in the same way as the other examples. They’re not creating a virtual place/space where it’s more useful or enjoyable to consume the same content than it would be elsewhere. But I’m sure it’s coming.


Selling direct will become an essential capability for publishers to have

One question on which I have had a long-standing difference of opinion with most of my friends in the biggest publishing houses — or at least with their publicly-stated views — is whether it is sensible for them to sell direct to end consumers.

That conversation was joined last week among three very smart people with very different perspectives. Madeline McIntosh of Random House, who added the title COO to her business card last week, expressed the opinion at the IDPF event at BEA that Random House would not “add value” by selling direct. This was in the context of whether it made sense to remove DRM, which, it has been suggested would help make it possible for publishers to transact ebook sales with consumers. (Some of the strongest advocacy for removing DRM certainly comes from publishers like O’Reilly and Baen who have built up robust retail businesses. F+W has a direct business across their two dozen or so verticals, and they sell DRM free.)

At the same event, Sourcebook founder and CEO Dominique Raccah enumerated useful things her company is able to do because they have direct customer contact, including testing out ideas for covers with live potential customers.

And following that, Andrew Rhomberg, a founder of the fledgling ebook bargain and conversation site, Jellybooks, took up Dominique’s side of this not-quite-engaged discussion in a post on the Digital Book World blog to make the point that the data publishers can gather through experimentation makes it worth having the direct customer relationship.

I agree with Andrew that publishers should sell direct, but the experimentation and data-gathering arguments he made — which actually resonate with the Jellybooks mission to improve discovery through both a different merchandising approach and by creating Groupon-like “deals” to entice purchasers — don’t strike me as the most persuasive arguments to make the case.

Partly that is because some of what Soucebooks accomplishes, like getting consumer reaction to covers, could be achieved without selling direct. Macmillan has told us that they have millions of email names (and the right to send them missives: what Seth Godin dubbed “permissions”) and has demonstrated that they can get a lot of response if they ask for an action. All that has been happening without them selling direct. (Macmillan will be starting to do that. Their VP, Fritz Foy, announced last week at our Pub Launch BEA conference that they’ll shortly be opening an ebook store, DRM-free. Hosting that event was the reason I didn’t hear Madeline and Dominique speaking around the corner.)

Our friends at Vogue Knitting Magazine use their Twitter followers to get opinions about how they should handle certain editorial choices they face for their magazine, just by asking.

Madeline was not saying that Random House shouldn’t have conversations directly with the readers of the books they publish. And they are certainly familiar with the point about data made by Dominique and emphasized by Andrew. They are, after all, the publishers of “The Lean Startup” by Eric Ries, which emphasizes the use of feedback loops to shape business strategies, including for the launching of the book! And everybody who knows Random House knows they are an analytical, systematic, and data-responsive organization.

What I took away from what I read Madeline saying was “we don’t have to execute the transaction in order to have direct customer contact and knowledge.” And what I also took away is, “whether it is because we don’t want to hurt our intermediary retailers or because we don’t want them to hurt us, we’d rather avoid competing with them. And if we sell our books direct, we are competing with them.”

That’s a powerful concern and it is built into the DNA of the biggest trade publishers. Selling direct works against the magic of trade publishing, which is the leverage provided by so many intermediaries helping reach the end consumer. I remember five years ago, when I was running most weekends with a Big Six C-level executive, telling him that I had just come around to the point of view that publishers should sell direct. He hadn’t then; he may not have yet.

I once had the (on more reflection) crazy idea that if all the publishers sold all the books of all the other publishers. there would be such a vast array of deal choices in the ecosystem that it would undercut the attempts of retailers to win share by selectively cutting prices.

But agency pricing changes that game because the price of an agency-model ebook is the same in all sales venues. In that case, does it reinforce the old logic of pushing sales through the intermediaries (as my running partner then and Madeline now apparently believe) or does it point to the path Raccah and Sourcebooks have taken, that Macmillan seems headed for, and which Rhomberg supports?

I think the latter. Here’s why.

We’re at the point now where all publishers understand that direct customer contact is essential. They may not all be fully aware that they are in a race with authors to gather the lengthiest list of useful customer contacts, but they are. The conversations between agents and publishers will very shortly start addressing how many names and permissions the author has with the number of names and permissions that apply to the author’s book the publisher can provide.

If a publisher works with the agency model — and Random House is a uniquely privileged publisher at this moment because they alone sell on the agency model without any pressure from the DoJ to change their practice — they can sell direct at their established price with the confidence that no retailer will embarrass them to their audience by undercutting them. That means there are three highly compelling reasons to sell direct:

1. If you have engaged in a dialogue that has “made” the sale, you don’t want to take the chance it will get “unmade” by sending the customer to a retailer with a vast array of choices, often suggesting other publishers’ books right on the same page which houses your book. There is wisdom that says every required click costs sales. Sending the purchaser to a retailer to execute a sale you have made not only lengthens the click stream, it introduces distraction and competition.

2. When an agency publisher makes a sale through an intermediary, it pays the intermediary 30% of the customer revenue for execution. Making the sale directly, adding that 30% to the 70% which would otherwise have been the publisher’s and author’s revenue, adds nearly 43% more revenue. Nobody is expecting publisher-direct sales to become a big share quickly, but a 43% increment is large. In some genres and niches, publishers might get to 20% direct sales in the next few years. In that case, selling direct would add more than 8% to their income, and to the income of any of their authors working on a percentage of the publisher’s net ebook revenue (which is almost every one that has earned back their advance).

3. It is much easier to execute further engagement with direct customers than through intermediaries. And further engagement is soon going to be desireable and before long will become essential. For example, an author could write a new ending or epilogue to a book (think non-fiction, not just fiction; this is already a big deal at tech publisher O’Reilly) that the author and publisher would want every  prior purchaser to have for free. Easily done if the customers are yours; a huge pain if they aren’t. Or a publisher next year might be happy to provide non-DRMd ebooks for customers who previously bought protected versions. Or a publisher and author might want to try an experiment of sending a sample of half the author’s next book for free to the readers of the last one. It will be far easier to get retailers to play along on things like this if they have to do it to remain “competitive” (more reminders that competition won’t just be about price!) with what the publisher provides its direct customers.

No retailer jumps for joy about publishers selling direct. Those publishers that do now, including Sourcebooks, the enthusiast publisher F+W Media (our partners putting on Digital Book World), and others, are usually publishing titles that are outside the circle of highly price-promoted big books. They’re managing to do it even without agency pricing. (I can’t resist noting that the DoJ doesn’t seem to care that Amazon won’t let these publishers use agency pricing, even though they might work that way with other retailers and, in my opinion at least, putting them at a disadvantage against their larger competitors).

But one clear lesson we should have all learned by now about digital change is that the bright lines that divided the author function from the publisher function from the retailer function are progressively being erased. It is possible for any of these players to perform any of these functions. (Indeed, a key idea behind Joe Regal’s new Zola Books business is that authors can do their own curation and become retailers, an idea everybody will have to wrap their head around just when we’re getting used to the idea that authors can become publishers!) Amazon isn’t shy about publishing; publishers need to overcome their reticence about retailing.

The guess here is that the ability to sell direct effectively will be seen as a necessary survival skill for publishers by two years from now, if not sooner.


If the government makes agency go away

The Wall Street Journal reports that the Justice Department has notified the Agency Five (Hachette, HarperCollins, Macmillan, Penguin, and Simon & Schuster) and Apple that it plans to sue them for colluding to raise the price of electronic books. I have no standing to comment on the law here. But if this does mean the end of the agency model, it would seem to be a cause for celebrating at Amazon and a catalyst for some deep contemplation by all the other big players in the book business.

Agency pricing, for those who have not been following the most important development in the growth of the book market, enabled the publishers to enforce a uniform price for each ebook title across all retail outlets. This was Apple’s desired way to do business, and it addressed deep concerns the big publishers had about the effect of Amazon’s loss-leader discounting.

Although the WSJ article and Michael Cader’s follow up in Publishers Lunch make no “agency is dead” declaration and there are quotes from publishers and others indicating that there are a range of possible outcomes, including a version of agency that is modified to allow some discounting, everybody in the industry now has to contemplate what it would mean if the agency model is legally upended.

To Amazon, it would mean they would be free to set prices on all books again, including the most high-profile and attractive ones that come from the big trade houses. That is an opportunity they are likely to seize with loss-leader discounting of the biggest marquee titles.

To Barnes & Noble, it would mean they have to devote cash resources to ebook discounting that they might have preferred to dedicate to further development of the Nook platform, maintaining the most robust possible brick-and-mortar presence, and improving the user experience at Unconfirmed stories abound that B&N is about to announce an international expansion. Whether that will produce cash flow immediately or require it for a while is not yet known. For B&N’s sake, it would always better if it were the former, but if they’re about to fight discounting wars, it might be critical.

To Kobo, it would mean that they also will need to devote cash resources to subsidizing price cuts to match Amazon. With their new ownership by Rakuten, they should have the capital they need to fight this battle. They must be glad that deal got done before agency was upended.

To Google, it would mean that the bookstore service piece of their ebook business will suddenly be highly challenged. Many independent stores might be pushed out of the ebook game completely; it certainly would be extremely difficult for them to support competition with Amazon’s prices. To Google itself, with their new Google Play configuration, it means they will have to both spend more margin and more management energy to be a serious competitor in the retail marketplace. There’s no clear evidence that they have the interest at the top to do that, although they certainly would have the resources.

To Apple, it would mean that their entire iBookstore model is in question. They apparently didn’t want to take on all the normal responsibilities of a merchant, which would include setting prices. Now they may have to.

To all the big publishers, including Random House (the one of the Big Six not being sued, because they stayed out of agency for the first year and therefore were not considered part of the “collusion”) it would mean that they will have to painfully reverse the re-pricing and systems adjustments they went through to implement agency in the first place.

Smaller publishers and distributors might be beneficiaries if agency is eliminated, but they might not. The agency model is a great advantage for those publishers who are able to fully implement it. But that is only six publishers — the Big Six — because Amazon has simply refused to let anybody else sell to them that way. That creates problems for the smaller publishers but an even more threatening one for distributors. All but the Big Six, if they want to sell to both Amazon and Apple, must operate a “hybrid” model, selling Apple on agency terms and Amazon on wholesale terms. The two are inherently in conflict. What is ultimately a threat to the distributors is that distributees that desire agency terms, and many would. might seek distribution deals from one of the Big Six. (It might be coincidental, but it is worth noting that IPG, the company having a fight with Amazon at the moment over terms, is a distributor.)

Of course, we don’t know how the Big Publishers will respond if they’re forced off agency. It’s long been my opinion that the 50% discount for ebooks is unworkable. It leads to ridiculous and unrealistic retail prices. (Publishers operating on the hybrid model have to have two retail prices: one on which to base the wholesale discount and another at Apple operating agency-style. It’s crazy.) Would the big publishers, if they couldn’t do agency, keep the 30% discount and their current prices? Would they go back to the 50% discount and jack the suggested retail prices back up? If they did the former and nothing else changed, the smaller publishers could be at a much greater disadvantage than they are now.

Over time, the biggest losers here will be the authors. The independent authors will feel the pain first. Agency pricing creates a zone of pricing they can occupy without much competition from branded merchandise. When the known authors are only available at $9.99 and up, the fledgling at $0.99-$2.99 looks very attractive and worth a try. Ending agency will have the “desired” effect of bringing all ebook prices down. As the big book prices are reduced, the ability of the unknowns to use price as a discovery tool will diminish as well. In the short run, it will be the independent authors who will pay the biggest price of all.

But, in the long run, all authors will just get less. They will join the legion of suppliers beholden to a retailer whose mission is to deliver the lowest possible price to the consumer.

Seth Godin has recently made the argument that this is simply inevitable. Perhaps it is. The laws of supply and demand would support that contention. But from my personal perspective, I don’t like seeing the government hasten the process along.

But what about the reader? The reader gets lower prices, cheaper reading. What the reader won’t see is that s/he’s not getting what s/he won’t pay for. Some of the best books won’t get written and the biggest casualties will be in the area of highly-researched non-fiction, like major biographies, in my opinion. Twenty years ago they used to say that a conservative was a liberal who’s been mugged. I’m not about to become a conservative, but I sure see how easy it is for the government not to understand how their decisions might affect the dynamics of a business. Or, in this case, a culture.


Learning what every publisher needs to know these days about direct response

Until his knee gave out a couple of years ago, I used to run regularly with a Big Six C-level executive. In about 2007 I told him I thought all the big publishers needed, but lacked, a complete and thought-through email list compilation and marketing strategy and policy. I suggested we could help his company by looking into that and designing one. (Consultants dream up ideas like this that require both outside expertise and extra hands and feet because that’s how we get work.)

My pitch got me nowhere.

In the intervening years I have become increasingly convinced that collecting names and using them right is now mission-critical for all publishers and most critical, and most difficult, for general trade publishers. And from what I can see, it isn’t getting the attention it should from anybody. (I’ll be delighted to get comments telling me I’m wrong, but I’ll bet they come only from very small publishers or thoroughly vertical ones.)

This is not my field. I know a lot about the traditional book supply chain, with first-hand experience dealing with every part of it. But my knowledge of direct response principles, starting with list-building and maintenance, is mid-level amateur. So I did what I would have done if my running buddy had responded positively to my suggestion that we help: I engaged a very smart person I know is a real expert on direct response to help me learn and think through what publishers need to learn and do. This post and at least one more will share that knowledge.

The smart person is Neal Goff, owner of Egremont Associates, most recently the CEO of My Weekly Reader Publishing. Neal has been applying direct marketing expertise in executive positions at Book-of-the-Month Club, Time-Life Books, Prentice Hall Direct, and Scholastic Library (formerly Grolier) Publishing for large chunks of the past three decades.

I started out with Neal declaring my assumption that publishers can make use of names they gather in at least three ways:

1. They can sell books to them.

2. They can use them for marketing, to spread the word about a book.

3. They can enlist them to be part of a community, interacting with you and others you gather, for the collective value (informational, monetary, curative, content-generating) the community can provide.

For openers, I asked Neal: if we want to help a publisher, where would we start?

Before he would tackle that question, Neal wanted me to understand a couple of very basic things about what is needed in a marketing database.

Obviously, we want to build a database that has all the consumers (millions, so the database has to be able to handle lots of them) we’ll be tracking and all the information about them by which we will ultimately want to “select” their names in the future. Neal emphasized that the most valuable information about them will be derived from their “actions” (when they click or buy or request information), much more than from our own (when we mail or post or offer.) And what we most want to know about those actions is summarized as “RFM” — recency, frequency, and monetary value — plus affinity, which is the similarity between what we’re selling and what they’ve bought before.

Recency refers to “the last time they did something.”

Frequency refers to “how often they’ve done something” (particularly when they do something positive, like buy a book from us).

Monetary value refers to “how much they’ve spent with us.”

Tracking affinity may require some work. Our fulfillment system knows exactly what they’ve bought from us title by title, but this information won’t be terribly useful if, every time we do a promotion, we have to go into our database and select the names of our book-buyers, one title at a time. That information has great value, though, if we aggregate our customers into meaningful groups, like those who bought a photography book or a military history title or a romance novel.

This means that transactiondata is critical. Neal explained that most publishers, particularly trade publishers, don’t necessarily have easy ways to capture individual customer transaction data in a marketing database. That may require a bridge of some sort to be built between your fulfillment systems, which capture the data necessary to complete transactions, and your marketing database, in which you want to aggregate fulfillment data in order to make it more useful selecting names for future outreach. That includes the affinity grouping described above and also such information as how much a customer has spent with you in the last six months.

Knowing that, one is equipped to start thinking about gathering names.The first step is to round up all the names you already have and put them together in one database, capturing the data you have about them in a consistent way. The next step is to establish procedures for collecting more names. All of this should be done with future selection criteria in mind which requires you to start thinking immediately about what the meaningful segments within your customer base are likely to be.

Every publisher already has a lot of names. People who have purchased from the publisher previously will have provided contact information, for confirmation purposes at least. People will have contacted the publisher for customer service, inquiries, or to sign up for newsletters or alerts.

But, often, the publisher will not have requested the necessary “permission” from the consumer to use their name for email marketing contact. (Seth Godin has been making this point for a very long time. He invented the term “permission marketing.”) The task of collecting and collating the names that are already in the house’s possession will provide a painful lesson in how much good customer information has been wasted because permission to contact was not secured when the name was collected. That lesson needs to be applied to the publisher’s future efforts.

Neal explained that you want to set yourself up to get permission from people as early as possible. On all purchase and customer service forms, when you collect email addresses, you have to include the option for people to choose to stay connected to you. You invite your contacts to check a box saying “keep me informed of other books you publish ‘on this subject’ or ‘by this author’ or ‘which will be of interest to me.'” You want to word your permission statement so that it doesn’t scare your customers into thinking you’ll be spamming them all the time, while at the same time keeping the wording broad enough that you don’t unwittingly cut yourself off from future marketing opportunities.

He also pointed out a paradox. The higher you set the permission hurdle, the fewer people you’ll get to give you permission but the higher the quality of that group will be. So if you make people “uncheck” a box to prevent permission, you’ll get more permissions. But if you make people “check” a box to grant permission, you’ll probably be more successful engaging the ones who grant it.

This took me back to a belief I held even before Neal started explaining the basics. Most publishers’ efforts to harvest email addresses have been weak and underthought (which isn’t surprising if there is no active plan to use the names). Can publishers create better reasons for the book’s consumer to engage the publisher? Can the publisher offer free additional content, for example, or notifications of updates (most likely to apply to non-fiction, of course), or a web site that offers additional value at which registration might be captured? Capturing the name and email address of somebody inquiring about a book or even one purchasing a book is all well and good, but wouldn’t those who signed up after already owning the book be that much more likely to be candidates for future engagement?

So where a publisher has to begin is to gather the names they already have, which are buried in nooks and silos around the company, tag them for where they came from and by the kind of “permission” to use them that exists, and work out how to add the additional contacts made with those people, especially including all transaction data, to the database.

In the next post based on Neal Goff’s direct response knowledge, we’ll talk about using the names, including how to act on Neal’s point that many things are “testable”, and that every customer outreach presents a valuable opportunity to test something. And we’ll explain why even though sending email is “free”, mailing to your free list too often or with bad execution can actually cost you money.

Here’s an unrelated postscript. We’re putting together a database of enhanced ebooks because we think the world needs one (at least temporarily.) Our newest teammate, Chesalon Piccione, has been doing the work on this and has posted on the E2BU blog about her efforts and what she’s learning by looking at the aggregation. It will take us a little while to wrestle the database itself into something postable, but we’re working on it. In the meantime, if you’ve got an enhanced ebook project, send Chess an email ([email protected]) and let her know so she can include it. A list of the data points we need is in the linked post.


There’s only one Seth Godin, but there are other authors who might emulate him

What shoved other news aside this morning was the word from Seth Godin that he won’t be publishing books with publishers anymore. This is another early indication that it is going to get harder and harder for trade publishers to sign up books.

It is not the first one. Thriller writer J.A. Konrath discovered the virtues of publishing through Kindle about 16 months ago. With the help of audience-building through his own blog, plus completed manuscripts that the New York publishers didn’t buy, he was pushed into learning how to monetize his own work without a publisher.

Last December, the news was that S&S author Stephen Covey had taken his backlist to ebook publisher Rosetta which had, in turn, made a temporary exclusive deal with Amazon. The motivations, apparently, were a bigger share of the ebook pie and the unique marketing capability Amazon has to really push something direct to appropriate consumers. That deal seemed to be with the original publisher’s explicit consent. (Agent Andrew Wylie recently formed an imprint to do the same thing with a batch of his clients’ backlist apparently without prearranging consent, although no lawsuits have been filed to date.)

At the last BookExpo, one of the leading agents in New York told me he is working hard to learn about self-publishing options because his authors are asking him about it.

Last week, one of the leading publishing consultants to “brands” told me that the 25% standard ebook royalty was pushing her company’s clients to think harder about self-publishing.

And it happens that right now I’m reading a book about my favorite subject (baseball history) called “A Year in Mudville” (about the Mets inaugural season) that was self-published through Smashwords but which, in editorial quality, exceeds many titles I’ve read from established houses. I don’t know whether author David Bagdade didn’t want to bother with the bureaucracy of pitching trade publishers, was rejected by them, or just chose the control and better margins of Smashwords, but Smashwords rather than one of the established players is dividing with the author 70% of the nine bucks I gave iBooks for the purchase

This way lies destruction.

Many years ago, my friend and sometimes colleague Mark Bide and I were talking about threats to the scholarly journal paradigm. For those not familiar with how journals work, it might be an eyebrow-lifter. Universities pay professors’ salaries and encourage them to write peer-reviewed articles. The journals get the articles for free, operate the peer-review and publication process, and then sell the collection of articles back to the university’s library. So the university both pays for the content’s creation and purchases it in its published form. Since the beginning of the web awareness, it has been predicted that disintermediation of journal publishers would occur.

What Mark told me was “watch the level of submissions.” That is, he believes the first sign that journal publishing is in trouble will be if the professors stop sending in their articles. So far, that hasn’t happened (that I’m aware of.)

But it’s going to be happening in trade.

On an email list I read, you can detect the annoyance of publishers who point out that neither Konrath nor Godin would be where they are today if publishers hadn’t invested in them and built their fame. There’s some resentment that neither Konrath nor Godin emphasize this point and, by not doing so, seem to suggest “anybody can do this.” I’m not sure that they’re saying “anybody can”, but it isn’t necessary to push that idea to do real damage to publishers’ futures, because the authors who can do this are among the the ones publishers need the most.

Starting in the 1990s, publishers started to ask “what’s the author’s platform” when they signed up books. In those days, they were asking whether the author had a radio show, a newspaper column, a speaking circuit, or extensive media contacts that could give them a leg up to promote the author’s book. But with the turn of the century and the development of inexpensive websites and blogs, authors were able to build their own platforms. And, lo and behold, they were able to build them faster and better if they had legitimately published books in the marketplace.

Publishers should have remembered the axiom that you should be careful what you wish for. This was, perhaps, the beginning of the unbundling of the publisher’s suite of services to the author. It used to be that the publication of a book was the platform and the publishers’ publicity and marketing efforts worked to capitalize on it. This was all part and parcel of the package: paying an advance; editing and shaping the book; putting it into a distributable (printed and bound) form; getting it known; and, of course, getting it into a store where a customer could buy it.

Publishers still pay advances although they’re doing their best to scale them back. Many don’t provide the same level of editing services that they used to; they often expect more books to be delivered by each of their editors and they also lean to agents they can trust to do a lot of the work of putting a book in shape. Putting it into distributable form isn’t nearly as hard as it used to be and doesn’t require inventory investment if the form is digital. Getting it known is something that Godin very articulately and accurately suggests he can do better himself. He is not alone and authors who can do this are explicitly what publishers are seeking. And getting the content into the customer’s hands is a drastically different proposition in a digital context than it was in the pure print world of 20 years ago, and digital distribution can be done with far less investment and far less organizational muscle.

So there’s less for a publisher to do for an author than there once was. And the publishers sent that signal when they started to focus on the author’s own ability to promote and then, over time, turned that ability into a frequent requirement for publication. If the publisher is going to do less, the author wants to pay less for it. Joe Konrath is very clear about the advantages he sees in getting the lion’s share of the revenue his books generate, rather than a mere author’s royalty.

But, somewhat more ominously, making more money through disintermediation does not appear to be the primary driver for Seth Godin. What Seth seems to be saying is “I want flexibility. I want to use what I write in whatever is the best way to build my overall career, revenues, and audience. I don’t want to be locked into publishers’ schedules and bureaucracy.”

That’s a massive challenge for big trade houses but it will be of increasing importance to big authors, particularly big non-fiction authors. It is much easier for a publisher to provide real value if they’re vertical. On the same mailing list I mentioned above, we got a comment from a biggish independent publisher who claims that the house is finding more and better ways to work with authors and really investing in them. But, we are told, they are all in verticals.

Godin may be a unique case. There are unique aspects to Covey and Konrath too. But it is not comforting for trade publishers to see that authors have alternatives, that as ebook sales rise the viability of the alternatives grows, and that the authors most likely to strike out on their own or look for new partners are those with the strongest existing connections to audiences.