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Will juvie publishing remain a book business as tablets take over?

November 1, 2010 by Mike Shatzkin 20 Comments

This post will discuss a realization I had even before this morning’s news about the developing e-products scene. I’ve always been a skeptic about enhanced ebooks, based on seeing my hunch that they wouldn’t work come true 15 years ago with CD-Roms. But it is increasingly obvious that CD-Rom type thinking will work very well for kids’ books. In fact, I’m beginning to think that enhanced ebook or app-type delivery could overwhelm books as a container-of-choice in a pretty short time. Single digit years.

The reasons that I’m skeptical about enhanced (or enriched, a recent term I’ve heard that might be better) ebooks is because most adult books are written as narrative reading experiences not intended to be interrupted and now being read by people who value the immersive experience. (Not all. But most of the kind we think of as bestsellers or literature.) My guess is that it is going to be hard to shift many of the hours of consumption now devoted to immersive reading to something quite different. And I see that as a qualitatively different challenge than moving immersive reading itself from one delivery mechanism (paper) to another (screens.)

The reason that kids’ material didn’t survive the CD-Rom period 15 years ago was the complexity of the delivery mechanism. You had to be at a computer, which usually meant a desktop computer. You had to load the CD-Rom, which on most computers (because few then were Macs) required additional navigation before they would play. These products just weren’t really accessible to kids, even if the programming they contained was designed for them.

But those reservations just don’t hold for kids’ “books” (if that’s what you call them) migrated to the iPad, a smartphone or, now, the NOOKcolor (which, I think, is how its owners would like us to spell it.)

The degree to which you can immerse yourself in a book is directly proportional to the fluency with which you read. That means that the younger you are, the more likely you are to accept the interrupted reading experience .

And as the devices get cheaper and more ubiquitous, parents and kids will learn fast how entertaining, instructive, and accessible interactive experiences can be.

I started writing this post over the weekend because we knew about several entrepreneurial ventures that were focused on developing kids’ material in this way. Then this morning’s Publishers Lunch told us the story of the developments at Callaway, which only underscore that some serious money is betting on this direction.

In short, I have come to the point of view that the juvie book business is going to migrate to enhanced digital products much faster than adult narrative text and that, as a result, the origination and publishing for the various kids’ book marketplaces will be increasingly the province of new companies and less and less the business of book publishers.

The Callaway Digital Arts story as Publishers Lunch reported it today is stunning. Not only did they secure $6 million in financing led by Kleiner Perkins Caufield & Byers’s iFund, they have won a $30 million “Ready to Learn” grant from the Department of Education. With this wind at their backs, Callaway says they plan to be producing 150 apps a year by two years from now. They’re being seen by Apple as a “strategic partner” helping the iPad to “transform education.”

While the Callaway start-up is the most dramatic, they’re hardly alone in focusing on the market for enhanced kids’ content built on books .

Oceanhouse Media is building what seems like a comparable business a completely different way. Rather than going to investors for capital, Oceanhouse managed to self-capitalize by building a network of developers willing to work for a piece of the projects they are developing. They’ve got deals with Hay House (that’s not for kids, primarily), their neighbors in San Diego. And they’ve secured rights to Dr. Seuss and Berenstain Bears. In a conversation with them, it sounded like they’d be delivering new products at the rate Callaway projects even sooner than two years from now.

Trilogy Studios has partners who have run game studios at Electronic Arts, Fox Interactive and Vivendi Universal Games and recently launched their most successful children’s product to date, a casual MMO (that’s a “Massive Multiplayer Online” game) based on a very successful animated feature film. They’ve expanded their portfolio to include interactive storybooks and social games and hired publishing veteran Marc Jaffe (recently of Rodale) to secure rights to some of the most recognizable entertainment and publishing brands for further digital development.

Rick Richter, recently the head of children’s publishing at Simon & Schuster, has his own new entrant in the field called Ruckus Media Group. They’re doing Apple and Android apps, have acquired rights to the Rabbit Ears Library (children’s classics read by celebrities) and are signing authors for original content.

Smashing Ideas is a website, game, and app studio that has been in business for 14 years. They’ve worked with youth-focused brands like Hasbro, Nickelodeon, and Disney for many years. Now they have a deal to develop projects with Random House and they’re also going to town on public domain books with apps out or coming soon for War of the Worlds, The Jungle Book, and The Wizard of Oz. This shouldn’t be a big surprise because Ben Roberts, who now leads their ebook division, helped create Alice for the iPad.

All of this investment and all of this development must be seeing the same thing I’m seeing. Kids are going to be a big market for this kind of product. Straight narrative reading can be immersive to the extent that the act of reading itself is easy and effortless. You can’t lose yourself in the story if you’re looking up words or frequently re-reading sentences to get the meaning.

That means it is a lot harder for a younger person to get immersed in just words on paper. That’s why kids’ books offer so much more than that: pictures, of course, but also pop-ups and various other entertaining three-dimensional devices, to the extent they can be delivered in something which is fundamentally bound paper.

You could say kids have been getting “enhanced books” forever!

The new devices have much better capabilities than CD-Roms did to engage in ways other than with words — ways which those of us who love immersive reading might find distracting or annoying but which kids love. Intuitive touchscreen navigation, a relatively recent development, makes it even easier to engage and interact with an active mind that hasn’t yet learned enough language to work comfortably with written cues.

I don’t live in a child-centric atmosphere, but I’ve been aware for the past couple of years that parents who thought their kids were too young for the connectivity expense of an iPhone would buy them an iPod Touch, which does what an iPhone does except make and receive calls (and, therefore, has no monthly connection fee associated with it.) A friend of mine who is pretty determinedly “old media” was recently asking me what I thought about a Touch for his 7-year old, who wanted to keep up with his friends by having one. These kids aren’t using Google for their homework; they’re playing games that are the leading edge of the new kids’ book business.

The iPad drew these new players into the explicit business of making enhanced ebooks of kids’ books. The NOOKcolor only adds fuel to the fire.

And because the NOOKcolor is half the price or less of an iPad, parents will be more relaxed about having their kids playing with it.

There is anecdotal testimony that kids can become more interested in a paper book after they’ve been exposed to the character and story through an enhanced ebook or app. We’re finding that out because the enhanced ebooks being made today are starting out from books that already exist. This is a totally sensible way into the business. Why add to the creative challenge by starting from scratch when there is a wealth of established brands and characters to license? And as the first great success in this enhanced kids genre, Alice for the iPad, demonstrated and Smashing Ideas has picked up, even the requirement of licensing can be sidestepped by using a public domain text as its basis.

The guess from here is that publishers — or whoever owns the rights — will have a nice business for a while licensing books and characters to enhanced ebook developers called “digital studios” who will make very successful products. In time — and not too much time — those studios will become the originators of the new characters and franchises and the book will become the “subsidiary right.” How soon? Not long. Three to five years?

Any publisher that wants to be serving the kids’ market in the middle of this decade better buy one of those studios, or start one.

This idea jumped into my head about a month ago; it had to get past my prejudice against annoying interruptions which is how I view most enhanced ebooks meant for grown-ups. So of course, we started to put together a panel on the subject for the Digital Book World Conference immediately. That got me talking to a lot of these companies. We haven’t made the final call on which three or four will be discussing what they’re up to at the show on January 25-26, but it will certainly be a conversation about juvie publishing’s near-term future.

Filed Under: Digital Book World, eBooks, Licensing and Rights, New Models, Publishing Tagged With: Alice fo the iPad, Apple, Callaway Digital Arts, CD-Roms, Disney, Dr. Seuss. Berenstain Bears, Electronic Arts, Google, Hasbro, Hay House, iFund, iPad, iPhone, iPod Touch, Kleiner Perkins Caufield & Byers, Marc Jaffe, Nickelodeon, NOOKcolor, Oceanhouse Media, Publishers Lunch, Rabbit Ears Library, Random House, Rick Richter, Rodale, Ruckus Media Group, Simon & Schuster, Smashing Ideas, The Jungle Book, The Wizard of Oz, Trilogy Studios, War of the Worlds

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Mike Shatzkin

Mike Shatzkin is the Founder & CEO of The Idea Logical Company and a widely-acknowledged thought leader about digital change in the book publishing industry. Read more.

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