Theresa Horner

Innovators and circumstances: the Frankfurt Publishers Launch show


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

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

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

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

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

Both sets of presentations are extremely diverse.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

 

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DBW lets us look at ebook bestsellers by price, and things are revealed


Digital Book World unveiled its new ebook bestseller lists this morning. They put this effort together — I program the annual January conference for them; this work has almost nothing to do with me (although I’m over-generously credited with having provided “guidance”) — over the past couple of months working with Dan Lubart. Lubart owns Iobyte, which had been tracking ebook sales and rankings for over a year before he took a job at HarperCollins late in 2011.

It occurred to me a long time ago that ebook bestseller lists had a core flaw. Because many print book lists were sorted by format (hardcover, trade paperback, mass-market paperback) — USA Today’s is an exception — they were effectively “tiered” by price. But ebook pricing, famously a point of contention as publishers tried to maintain higher prices in the marketplace through agency agreements, varied widely and that variance was obfuscated in the lists.

So when four self-published authors land on the NY Times list, the stories saying so don’t even mention the big price advantage working at the back of two of them, whose books were 99 cents. All the more credit, of course, to Colleen Hoover, who scored with two books on the list priced at $7.99. She has since signed a contract with Simon & Schuster. (Bella Andre, who has books at $4.99 on the list, spoke for us at Digital Book World III last January.)

In the absence of prompt unit sales reporting by accounts, which doesn’t seem to be on the horizon any time soon, the only way timely lists of this kind can be assembled is with a certain amount of informed guesswork. (You can collect unit sales numbers through the publishers, but only with a very serious time lag.) The Lubart-DBW team can see the sales ranks of all these books on the various ebook vendor sites, but they have to take educated guesses about how to factor in the different rankings (power law curve; sales drop sharply as ranks drop) and different account sales power (number five on Amazon almost certainly sells more than number five anywhere else).

So nobody’s list can be above dispute.

DBW’s methods, which I have discussed with them and which Lubart lays out in a post, are objective and reasonable and constantly under review. So their lists deserve to be treated with respect and analyzing what they tell us is worth the effort.

First of all, there is a striking lack of self-published material represented. There is not one self-published ebook in the overall Top 25 and only two appear at all, both on the lowest price band (from zero to $2.99).

Secondly, there is a publisher I hadn’t heard of that shows up with two titles in the cheapest band and with one in the next one up ($3-$7.99). That’s “Entangled Publishing”, which has an interesting business model that Jane Litte talked about on her blog a couple of months ago. They’re also intriguing because one of their hits, a book called “The Marriage Bargain”, was on the Hollywood radar screen when I was out there talking to people two months ago. Now they know there’s a new publisher to watch.

The Top 25 break down by publisher this way: Random House 10, Penguin 5, Scholastic 3 (we know what those are), Simon & Schuster 2, Hachette 2, Macmillan 1, HarperCollins 1, Soho 1. (Soho is an independent New York-based publisher.)

But what is even more interesting to me, and which defies the notion that the big publishers aren’t aware of the value of lower pricing, is how the list breaks down in the lowest price tier (they list 10 titles): Random House 2, Self-published 2, Entangled 2, HarperCollins 2, Soho 1, Penguin 1.

Six of the top 10 titles under $3 belong to the Big Six.

The Big Six plus Scholastic have seven of the top 10 in the $3-$7.99 price band as well.

Above $8, only Kensington breaks the monopoly of the Big Six, with one title.

So it would appear that the notion that The Big Six are hurting authors by pricing their books too high is not borne out by this data.

It will be particularly interesting to watch how the lists change in the various price bands later this Fall if the DoJ settlement is approved and the retailers are free to set prices on the output of half of the Big Six.

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Barnes & Noble announced today that they’re going into the UK with partners they will name later. This was a move the industry has been waiting for. The expectations that B&N would team with Waterstone’s were dashed by the surprise deal the British retailer announced with Amazon earlier in the summer.

This is a very important move by B&N. They absolutely have to get global to be a long-run competitor in ebooks, and Britain is certainly the logical place to start.

I see two big issues for them. The obvious one is that they probably won’t be partnering with a signficant book retailer since Waterstone’s has their Amazon partnership and WH Smiths is partnered with Kobo. So they might get a lot of consumer reach — through one of the supermarket chains, say — but the core book market won’t be instantly accessible.

The less obvious one is that dedicated ebook readers, which is where Nook is strongest, particularly with the Glow, are losing ground to a plethora of tablets, led by iPad, of course, which is rumored to have a new smaller version coming. There is a reasonable theory that the eink device has “peaked” and that multi-function tablets will be the point of entry to the ebook market for new consumers in the future.

In fact, that theory is one we’re discussing at our Pub Launch Frankfurt conference on October 8, as Peter Hildick-Smith applies his Codex Group research data to the question of how digital markets will shape up in countries beyond the US and the UK in the future. At the same event, B&N executives Jim Hilt and Theresa Horner will appear as well.

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Publishers Launch Frankfurt will focus on data and retailers that every publisher needs to know


Our Publishers Launch Conferences venture is doing two shows in Frankfurt: a full-day “eBooks Around the World” program on Monday, October 10 and our first conference dedicated to children’s book publishing, “Children’s Publishing Goes Digital”, which will be a half-day program on Tuesday, October 11. We’ve enlisted the capable help of Lorraine Shanley of Market Partners International to program the children’s show. This post will talk about what I’ve been developing for the all-day Monday program.

There are other things going on, but there are two central themes for Monday: data and retail.

We are always focused on data about digital change because in this transitional time we’re in, none of us can get enough of it. Things are changing fast and if you haven’t looked at the thermometer in the past week or two, you probably don’t know the temperature. That’s even more true on a global scale, because global data is that much harder to get and track.

We are focused on retail because the list of “major accounts” for all publishers will be changing in the next few years. Global players will often (but not always) be replacing local ones as each publisher’s biggest intermediary customers. The ebooks marketplace in the US demonstrates how rapidly new channels can rise with the Kindle and Nook.

To begin the day at Frankfurt, we will have what we believe is the most comprehensive research report yet produced about the digital transition country-by-country and region-by-region. The Milan office of the global consulting firm, A.T. Kearney, working in conjunction with Italy’s Bookrepublic, will update and expand some substantial research they did at the end of last year. They presented their findings at the IfBookThen conference in Milan in February.

The Publishers Launch Conferences team — Michael Cader, Emily Williams, and I — have suggested some additional lines of inquiry around the intrusion of English and the expansion of the global players’ activity which we believe will enhance the already-robust research the Kearney team did before.

We’ll have a data presentation of a different sort from Jonathan Nowell of Nielsen, the company which both is the guardian of a worldwide bibliographic database and the operators of BookScan, which collects point-of-sale information around the globe. Jonathan is going to focus on how metadata affects sales and specifically how deficient metadata costs sales. The lessons here will be the ones everybody will take home and implement immediately. Nowell will point publishers to the metadata fixes which are absolutely necessary to avoid sales leakage.

The retail conversations and presentations will be sprinkled throughout the day.

We wanted to focus our audience on what we consider to be a remarkable story, the resurgence of Barnes & Noble in the digital realm since the introduction of the first Nook device 20 months ago. B&N’s success in using their brick-and-mortar presence to combat Amazon’s two year head start with the Kindle is a case history that retailers in every country in the world will want to examine carefully. That’s why we’re giving it close attention.

Theresa Horner, B&N’s VP for Digital Content and Patricia Arancibia, Manager, Digital Content, International, will join Michael Cader and me for a conversation about how they did it. They started out with a Nook that was pretty similar in price and features to the monochrome e-ink Kindle, but then they carved out their own device niche by offering Nook Color and a touchscreen version which, to this point, nobody else has matched. The color capability enabled B&N to expand their ebook product offering to include content, like magazines and children’s books, that wouldn’t work well on a Kindle or original Nook device.

But they also expanded their content base of non-English publications, building a Spanish-language store for their domestic US market that is more comprehensive than any other in the world!

All of this has propelled B&N to a spot where they are a significant challenger to Amazon’s ebook supremacy in the United States. There have been some recent indications that Nook devices may now be outselling Kindle devices, although not everybody agrees with that proposition.

Many countries have a dominant brick-and-mortar retailer that is contemplating an impending challenge from Amazon. Whether or not the B&N formula is replicable in other markets, perhaps by licensing the Nook or the Kobo reader or the new Google reader or another device, is still a fair question. The answer might be much clearer after the B&N section of our show.

But B&N has not (yet) announced any plans for a global presence. Four other ebook retailers that will grace our Frankfurt stage are declared global players.

David Naggar of Amazon.com will talk about what publishers around the world should do to best benefit from Amazon’s continuing global expansion. We know that Amazon will be a market leader in every country they enter. They are the biggest account for most US publishers today and they will be a top account soon for every publisher in the world if they aren’t already. Tips from their experience about what works best for publishers to increase their sales are useful to every publisher in every language. We had a presentation from Amazon at our Digital Book World show in New York last January which attendees all agreed was helpful and enlightening; we’re expecting the same at PLC Frankfurt.

Tom Turvey of Google will also have a lot to talk about at PLC Frankfurt. Google has just announced a Google ereading device and we keep hearing rumors (although not yet directly from them) that they will be pushing their ebook capabilities hard this Fall when a host of new tablet computers hit the market. Google’s program is the only one really built for participation by retailers and web sites everywhere and there has been a pretty widespread uptake by independent stores in the United States in the program’s opening months. If the biggest dominant chains in each country will want to pay close attention to what B&N has to say, the independent stores around the world, and the publishers that depend on them, will be paying close attention to what Google has to say.

Kobo just opened a store in Germany, following quickly on Amazon’s heels in the biggest single European market with a title base larger that is larger than Amazon’s and larger than the German aggregator, Libreka and with a special reader for the German language. They have said they’ll have stores opening in Spain, France, Italy, and Holland in the next few months. We’re working out the details with Kobo about what they’ll discuss in conversations early next month, but we know they’ll be on the program. Kobo has been distinguished among their competitors so far by their declared willingness to share sales data with publishers and, indeed, they have established a reputation for revealing things we didn’t know about the market at presentations they have made before. Kobo is the purest ebook play among the global competitors that have been in the market for some time; all the rest have other fish to fry.

But there’s a new entrant to global ebook retailing that, like Kobo, is (at least for now) purely about ebooks. That would be the UK-based start-up, Anobii.Their CEO, Matteo Berlucchi, will explain their very enticing proposition to enable crowd-sourced curation and taxonomy for books. On Anobii’s format-agnostic discovery-social platform, you’ll be able to follow a book, an author, a reader, or a topic, and you’ll be able to name your own topics. The basic functionality is supposed to go live in the next month or so and we believe our October conference will be a debut of sorts for what promises to be an entirely new approach to ebookselling. And publishers will be excited to hear that Anobii intends to share data with their vendors as well.

It could well be that the retailers we will have on the stage at PLC Frankfurt will be delivering half the sales or more for most of the world’s publishers in a few years, or perhaps even sooner than that.

Data and retail are our features, but there will be much more covered in the show.

Tracey Armstrong, the CEO of Copyright Clearance Center (which is, along with Perseus Constellation, one of our Global Sponsors) will talk about the importance of collective licensing to capture revenue that will otherwise be lost in a world where any fragment of any book might be a key component of somebody’s new app or web site.

A panel of agents will discuss the emerging new models in that segment of publishing’s value chain.

We’ll have what I think will be a very provocative panel of trade publishers who are benefiting from the fact that their company works in segments other than trade which made the digital transition sooner.

Octavio Kulesz did a pioneering study of the digital transition in the developing world that suggests that entirely new tactics will be called for if publishers are going to realize revenue from the masses who will read books on cell phones, but can’t afford to pay much.

Chris Bauerle, the Director of Sales for Sourcebooks, a mid-sized (or perhaps we should say small-major) US trade publisher, will explain their transition to a digital workflow, done a few years ago but paying off in big ways now that they want to use their content in new creative ways.

And Michael Cader and I will have a thing or two to say as well.

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