Joe Wikert's Publishing 2020 Blog

In-Book Ads? Let the Whining Begin.

It's going to happen.  It's not if, but when.  I'm talking about the day when you'll find ads throughout ebooks.  This Fast Company article provides a nice overview, including some info on a few related patents recently filed by Amazon.

If you're a purist and who's totally offended by the idea of ads in a book, get over it.  My guess is you'll have the option to pay more and still get ad-free ebooks.  Tightwads like me, on the other hand, will gladly deal with the minor inconvenience...and we'll save a few bucks along the way.  Heck, I miss the ads in the Kindle magazines I subscribe to, so what does that say?

The world of content is rapidly changing, including how it's monetized.  More options are a good thing, no matter how bad this idea sounds to you today.  I'm just curious to know more about what Amazon plans to do with the money they'll earn from all these in-book ads.  Will they pass any of the income along to publishers and authors?

Fast Company's Bezos/Amazon Cover Story

The latest issue (July/August) issue of Fast Company magazine features an excellent cover article about Amazon and Jeff Bezos.  As I read through it I highlighted a few excerpts and made a number of notes:

Recently, Bezos claimed that Kindle e-books add 35% to a physical book's sales on Amazon whenever Kindle editions are available. Put another way, for every three print copies of, say, Malcolm Gladwell's "The Outliers" the site sells, it also sells one Kindle e-book -- or about 25% of total sales.

This felt like an overstatement to me...till I sat down and checked the numbers.  It's true, at least for the top several titles I looked at from our O'Reilly list.  Quite a few of the books I looked at had Kindle sales that represented anywhere from 20-30% of the total Amazon sales.  The key point: If you're a publisher, you need to get your content into this platform.  Authors, if your publishers don't already have your content available on the Kindle, when will they?  As much as I hate the Kindle's closed nature there's no arguing with the results.  Of course, publishers are also free to sell Kindle content direct to consumers, just like we do at O'Reilly.

Jeff Bezos is trying to do to book publishers what Steve Jobs of Apple did to the music industry. With its iPod and iTunes Store, Apple carved out a largely virgin market so fast that it was able to wrest control of the digital-music distribution system and thus dictate what the record labels could do.

I've occasionally been concerned about this but I'm not sure there's much to fear after all.  I'm seeing more and more e-storefronts popping up every week and even though the Kindle is pretty popular it hasn't been the runaway success the original iPod was.  Even the iPhone itself is a worthy competitor to the Kindle.  Ironically enough, I think it's when Amazon fully opens the Kindle platform that we'll have to worry the most about this.  That will probably have to happen at some point, but Amazon doesn't seem to be in any hurry, so relax...for now.

Should that happen, book publishers would have more to fear than just being squeezed. Amazon could phase them out completely, treating them as the ultimate middlemen orphaned by a new technology.

Forget about Amazon.  Any publisher that isn't already worried about this in general is asleep at the wheel.  With all the great self-publishing services out there and the ever-growing importance of social media and author platform it's crucial for all publishers to determine the value they add to the ecosystem.

In some ways, book publishing operates like one of Joseph Stalin's five-year plans.

This statement made me laugh out loud.  Literally.  It's painful to admit but true that some publishers still try to lay out 3- and 5-year financial plans.  This, in an industry where most have had a hard time coming close to their latest annual and even quarterly forecasts.  Ugh.

Here's a doomsday scenario put forth by Richard Curtis, a literary agent and founder of E-Reads, an independent e-book publisher...

The rest of this excerpt would be pretty long, so let me summarize by saying that Mr. Curtis is concerned about Amazon using their BookSurge service to print all the copies they'll sell.  Is that really scary?  We're talking about a more efficient model!  If the unit cost (after factoring in the transportation savings) is less than an offset printing of those copies, why wouldn't the publisher want to do it this way?  If anything, it's a wake up call to the brick-and-mortar stores out there to figure out what value they add to the model.  Instant gratification.  Check.  How about beating Amazon at their own game though and offering print-on-demand of an infinitely long title list at the individual store level?

You might think that because publishers profit from this arrangement -- they don't have to pay for paper, ink, manufacturing, warehousing, and transportation or suffer debilitating returns -- they would be pleased. They aren't. Amazon is creating a sticky price in consumers' minds and redefining the cost of a "book" just as Apple did with music.

I disagree.  Speaking as a publisher I'm thrilled that Amazon is experimenting with pricing, particularly since it's on their dime.  I just hope they share the results with publishers so we can all learn together.  The Kindle has been out for more than 18 months though and I haven't seen any analysis from Amazon on this front yet.

Let's also not forget that a simple port of a print book to an e-format, which is pretty much all that's happening right now, is likely to have a lower value than the next generation e-books that truly leverage the platform.  That's when things get interesting and let's face it, that pricing model is completely unknown.

The cell phone is an excellent example of what I'm talking about.  Remember way back in the days when cell service was all about voice service and the number of monthly minutes?  The phones couldn't do anything else so the providers had to compete on monthly rates.  There was a time when you'd go from one provider to the next, just to get a better monthly plan.  Now it's all about who carries what phone and what additional services they offer.  Have you noticed how the monthly rates just keep going up, mostly because we're all adding more services to our plans?  Look at your iPhone 3G S today, compare it to your brick-of-a-phone from 15 years ago then look at your Kindle and think about the possibilities down the road...

There is more substantial evidence that Apple may be planning a move into e-books.

That's good news for everyone, except possibly Amazon.  Competition is a good thing though, so I hope Apple does introduce a product in this space.  I'll buy one.

Unfortunately for Bezos, not only is Apple far more skilled at designing beautiful products people are eager to buy, but it may also be a more desirable partner for publishers than is Amazon. While Apple drives a hard bargain and might be eager to grind publishers into pulp on price, unlike Amazon, it has little desire -- or history -- of attempting to usurp the publishers' role or to control content.

An elegant device and a financial model that would be no less appealing than Amazon's existing one?  Sign me up!  Again, competition is a beautiful thing.

As for book publishers, they benefit from a fragmented market with no single entity controlling the distribution pipeline. The more that Amazon and Apple duke it out, the better for them.

Exactly!  And you can replace "publishers" with "authors" in that first sentence and it's just as accurate.

Looking long-term, as readers migrate to digital books, there is a real possibility the basic form of the book will change.

It's not a "real possibility."  It's a certainty and it's also why I'm so excited to be part of this industry.

A Kindle App I'd Buy

Amazon's tightly closed Kindle ecosystem doesn't offer customers an App Store like Apple does with the iPhone.  That doesn't matter though because the idea I have in mind would reside on your computer, not the Kindle...

How many emails like this do you get each week?: "You need to read this article over on so-and-so.com. I just read it and thought it was terrific/funny/relevant/etc."  I get these all the time.  Sometimes I click the link and read the first sentence or two.  If it's good and I don't have time to read it all now I'll leave that browser tab open and hope I don't forget about it, but I often do.  If the article looks really good and I don't want to miss it I might even print it out and read it later.  None of these approaches are very effective though, especially when I also have a $360 Kindle at my disposal.

OK, if you're a glutton for punishment you'll try to access all those articles on your Kindle via Whispernet.  Good luck with that.  Even if you manage to get the page loaded you'll find the formatting and readability is awful in most cases.  And what if you're out of Whispernet range, say, on a plane?

Someone needs to write a desktop application that lets me grab a url and drag it to my Kindle, which is connected to my Mac via USB.  The app has to do more than just drag the web page to the Kindle though; it needs to convert the contents of that page to mobi format so that it looks nice and clean on the Kindle display.

I'd use this app every day and I'd be more than happy to pay for it.  Let's not stop there though...  Think of the dynamic advertising income opportunity a developer could create with this.  During the conversion process, the app would also apply Google AdSense-type logic to the contents and serve up relevant ads in each piece.

The beauty of this is you don't have to work within the confines of that closed Kindle system Amazon has built.  You're just pulling content off a website and converting the HTML into mobi files (plus the advertising component, if you want).

Does this tool already exist and I've somehow overlooked it?  If so, where is it?  If not, how soon can someone write it?!

P.S. -- I'll ask the question once again: Why isn't Amazon building this sort of thing?

Recent Thoughts About the Amazon Kindle

I made a few notes while reading this Book Business magazine article over the weekend.  It's well worth reading, btw, but here are a few items I underlined:

The innovation of the Kindle was not to improve e-reading—many earlier e-readers offered a very similar reading experience—but to dramatically alter the purchasing experience through its wireless capability.

So true and yet so easily forgotten.  The Kindle could have simply become Newton 2.0 without this important feature.  Customers come for the eInk display but Whispernet is what keeps 'em coming back.  (It still blows my mind that no other Kindle competitor has figured this out...)

...obviously publishers could do better by designing online-oriented cover versions that would not only be more eye-catching and dynamic, but potentially even interactive.

Another obvious but overlooked point.  We're all still applying the print rules to the e-world.  Just put a two-dimensional image of the print book's cover on the Kindle edition's product page and you're all set.  When will we start seeing that precious screen real estate occupied by something that's much more engaging and dynamic?

This analysis suggests that e-books could, as a stand-alone business, be priced far below Amazon’s current $9.99 pricing and dramatically lower than p-books.

I have no doubt some e-books can be priced below $9.99.  Heck, quite a few print books are already there (e.g., mass market paperbacks).  I'm also a big fan of the idea that lower and lower prices will cast a much broader customer net, meaning you'll attract quite a few customers who otherwise would have ignored your product.  But as Apple's iPhone App Store has proven, while there's a big difference between sales of a $4.99 app and a $9.99 app, there's a much bigger difference between a free one and a 99-cent one. 

Experimentation is the key here, of course, and thanks to the e-book model, it's pretty easy to make price changes on the fly.  As I've also mentioned before, I think sponsorship will have a role in the e-book marketplace.  Just like ads make the magazine world work, sponsorship is likely to help keep certain e-books at an irresistibly low price.

Finally, I wanted to toss in another idea I'll bet Amazon will spring on us at some point.  Why haven't they bothered to insert any "Where do I go from here?..." links at the end of Kindle editions?  If I just read a great book by Joe Author, why aren't they inserting links to other books written by Joe Author at the end?  Enable one-click buying and boom, they extend their e-commerce reach even further.  If not other books by the same author, what about simply utilizing the "customers who bought this item also bought..." functionality of their website by inserting it at the end of the Kindle edition?  If I just had a good experience reading this book (or magazine, or newspaper) I'm more likely to buy something else from you; why rely exclusively on email blasts and other e-marketing strategies from the 1990's?

Btw, when Amazon does implement something like that last item (and they will!), they'll make even more money off it by structuring it like their other online placement/marketing campaigns.  Publishers will have to pay for the privelidge to be included in these links. I'm not suggesting that's good or bad...just pointing out it's yet another way Amazon can make a few more bucks along the way (and possibly reduce the price of the Kindle hardware?...)

Textbooks: A Market Begging for Change

Every day brings more news about the book industry's ongoing evolution.  Whether it's a shiny new e-reader, a recently-opened e-storefront or some other development, it's clear some experimentation is taking place...maybe not as much as you'd expect, but there's some happening nonetheless.

One area where experimentation efforts should be ramped up significantly is the textbook market.  Seth Godin wrote his own rant about this over the weekend and I think he makes a number of excellent points.  College students are some of the most clever, resourceful and imaginative people on the planet.  They're no more tired of getting hosed by overpriced textbooks than their parents, but they're fortunate enough to be in college at a time when e-alternatives are all around.

The problem here isn't that the customers are not willing to try new alternatives to the tired old textbook.  No, the real problem is with the system itself.  Publishers, schools, authors (which oftentimes means "professors") and campus bookstores all have plenty at stake and have enjoyed the current model for far too long.  It's yet another case of The Innovator's Dilemma.  You'd think it would be an excellent opportunity for an upstart to come in and completely obliterate the system, sort of like what Craigslist did to the newspaper industry.

Kudos to efforts like what Governor Schwarzenegger is trying to do in California.  Then there all the open textbook programs that have been sprouting up.  All well and good but I'm not sure any of this will have a material impact on the current model.  Something bigger has to take place first.  Maybe it will come from several states joining forces and saying "enough is enough!", but California probably won't influence market-wide change on its own.

On a related note, for-profit schools like ITT and Devry are growing in popularity, partially because of the better value they offer compared to the traditional four-year institutions. As a publisher I've found these schools to be very open-minded about choosing the best course materials.  If the pendulum continues to swing in their direction maybe this is where the new model will arise.  They'd be wise to follow the "chapterettes" model Godin describes towards the end of his rant.

Getting More Magazines on the Kindle

The Kindle is now more than 18 months old and there are still only 24 magazines available for it.  Why so few?  I've heard several reasons why and the most likely ones are (a) the magazine publishers don't like the financial terms offered by Amazon and (b) they also don't want to give up control of their content (and direct customer access) to Amazon.  I've got an idea that solves both these problems and would make Kindle owners everywhere much, much happier.

The company I work for, O'Reilly Media, Inc., sells Kindle editions on Amazon's website.  We don't rely on Amazon as our only means of access to Kindle owners though.  We also sell e-book bundles on our site and those bundles feature all the popular formats including .mobi for the Kindle.  Magazine publishers (and newspapers too, for that matter) should take the same approach and sell Kindle content right from their own websites.

Granted, we're talking about a single block of content with a book vs. an ongoing subscription with a magazine or newspaper...and that's where things get interesting...

Amazon has a document conversion service for all Kindle owners.  I can e-mail a PDF to my Kindle address (joewikert@kindle.com) and Amazon will convert that PDF and wirelessly send it to my Kindle.  The service used to be free but now it costs 15 cents per meg for the upload.  Each of the magazine issues currently on my Kindle (The New Yorker and Technology Review) are less than one meg, btw.

Here's how the model would work: Each magazine website would simply add another option to their new subscriber page.  This option would be for Kindle delivery.  Choose it, give the magazine publisher your @kindle.com address, set your Kindle e-mail account to accept incoming messages from that magazine's server and you're done.  The result is a direct relationship (again) between magazine publisher and customer; it's just that this particular customer happens to receive issues via their Kindle.

That's how the front-end works, but how about the back-end?  The magazine publisher could prep the issue in PDF format, send it to the customer's @kindle.com address and let Amazon do the conversion and upload work for them.  Sure, Amazon gets 15 cents/meg, but each magazine publisher would simply have to figure out how much that translates to per issue and price the subscription accordingly.  Btw, if you want to avoid the Amazon charges, have the subscription sent to your @free.kindle.com address and simply move the content from in-box to Kindle via USB cable.  Another option is to take that last option a step further, automate it a bit, and go back to wireless delivery, like KindleFeeder now offers.

As a magazine publisher you'd keep 100% of the subscription price.  You'd also do away with printing and postage fees, so please keep that in mind when setting the subscription price!  Finally, you could determine how much advertising you want to keep in the digital edition.  Maybe you'd want to offer two plans: A higher-priced subscription with no ads and a lower-priced one with all the regular ads.  As an added bonus, those ads could now have live links to the advertiser sites; good luck pulling that off in the print edition.

Speaking for Kindle owners everywhere, I hope magazine publishers will follow O'Reilly's lead and start offering a direct-to-Kindle-customer subscription plan.  What do you have to lose?!

P.S. -- Why am I so comfortable publishing my Kindle e-mail address here?  Because every spammer in the world can send messages to it and they won't get through.  I give Amazon a list of acceptable incoming e-mail addresses and none of them are from spammers.

The Blurb Solution

A good friend of mine was recently telling me about her (almost) 13 year-old daughter and her poetry.  She told me I needed to read some of these poems to believe them.  (They're so good, in fact, that her teacher thought she plagiarized them; I thought you were presumed innocent till proven guilty in this country!)  She also wanted to know how she could go about trying to get them published.

I told her I knew nothing about the poetry publishing world, but that they'd have to either find some publishers to approach or a good agent to represent them...or, they could just go the self-publishing route.  I gave her information on a couple of options and she wound up choosing Blurb.  Within a very short period of time, my friend had her daughter's poems loaded into Blurb and ready for sale.

Self-publishing rocks!  Where else could an (almost) 13 year-old get their poems published, virtually overnight?!  And btw, her mom is right.  See for yourself by reading a couple of the poems in her new book, Thirteen: My Poems.  Use Blurb's preview feature to read the one called "I Tried to Touch the Sky" and tell me this kid doesn't have remarkable talent!

The author's name is Annie Mackowick and it just so happens that tomorrow, June 11th, is her 13th birthday.  I'm about to order a copy of this one for myself.  If you'd like to make an aspiring author's 13th birthday extra special, be sure to order a copy of your own.

P.S. -- I have no financial interest in this.  It's just my way of helping spread the word for a great service (Blurb) as well as an up-and-coming author.

"Gutenberg 2.0"

"Gutenberg 2.0"  That's what this Boston.com article calls the future vision from BEA.  It's worth reading but I feel compelled to add my two cents on a few points:

One said the recording industry shot itself in the foot by not releasing singles in compact-disc format, accelerating the shift to downloading.

I think they're suggesting the music industry could have averted disaster by just selling singles CDs in brick-and-mortar stores.  I have a hard time believing that.  The music business wasn't affected so much by the need for the granularity of content as it was by the immediate gratification of e-distribution.  IOW, a bunch of singles on CDs in your local music store  wouldn't have stopped the Napster tsunami.

The article goes on to say that sales of individual chapters will help the book publishing industry avoid the same fate.  Although I think there's an opportunity for e-chapter sales I'm starting to believe that opportunity has plenty of limits.  Certain genres simply don't lend themselves to it but others certainly do.  The more important point is that quick print to e- conversions aren't likely to move the needle much, and simply selling print chapters in e-format falls into that category.

...(Symtio is) an alternative to Amazon, which with its Kindle reader represents a "closed marketplace." Users can buy its e-books only at the website.

The Kindle is viewed as a closed marketplace but that's starting to change, no thanks to Amazon! At O'Reilly we sell e-book bundles of our titles which include Kindle editions in .mobi format with no DRM.  So in this case, the publisher has established its own e-storefront.  Kindle owners don't have to go to amazon.com to buy Kindle content.  Other (smart) publishers are likely to follow suit.  I also expect to see other non-publisher e-storefronts pop up to serve Kindle owners with paid content (think Feedbooks, but for paid content).

One galley that seemed to exemplify several trends was for "Level 26," the first "digi-novel" from Anthony E. Zuiker.  Every 15 to 20 pages, Zuiker tells the reader to log into level26press.com to access a "cyberbridge" video that builds off the printed product.

That's asking a lot of the reader.  I also worry about the mixed media solution.  Someone reading a print book probably doesn't want to go back and forth between the book and a computer screen.  The better approach is to turn this into a 100% e-product, not one that straddles the fence between print and e-.  It sounds like a product that's tailor made for Vook.tv, btw.

Google Wave and Publishing

Have you heard about Google Wave?  It's been described as "how email would work if it were invented today."  So instead of simply tacking on new features to existing email clients, Google Wave offers a clean slate approach.  In fact, it looks like Google Wave will offer a new, intuitive way of communicating while still using some of the email/IM/etc. features you've grown to know and love; IOW, it will offer the best of both worlds.

Think about this now in publishing terms.  The Sony Reader is just a convenient way to access books in electronic form.  The Kindle took it up a notch by enabling wireless delivery of more content forms, not just books but also magazines and newspapers, for example.  At the end of the day though, both of these products still mostly re-render print content in e-form.  They don't do much to fully leverage the e-platform, mostly because they're working with content that was built for print, not e-use.

What the publishing industry needs is a product like Google Wave more fully leverages e-content capabilities while still supporting all of the useful features of print.  If you haven't watched the Google Wave demo from last week's Google I/O you need to (see below); and even if you can't spare the almost 90 minutes the full demo/keynote required, just watch the first 10-12 minutes and you'll have a good feel for this amazing service.  And when you watch it, think about how an approach like the one used for Google Wave would create an enormous splash in the publishing industry (books, magazines, newspapers, etc.)

Thinking "instead about the future of reading"

I spent part of this past weekend in Detroit with my son attending Game One of the Stanley Cup Finals.  As Penguins fans the game was a bummer, but as a father and son road trip it produced a host of memories we'll have the rest of our lives.  So what in the world does this have to do with the business of publishing?

See that picture on the left?  It's a shot of what's left of glorious old Tiger Stadium, also in Detroit.  Click on it to blow it up and see just how sad the image is.  We're talking about a stadium where Ty Cobb and other Tiger greats once played.

As I considered that scene Sunday morning I couldn't help but think of the publishing industry.  For some reason it also reminded me of this recent Wired article by Clive Thompson.  The key quote is:

We need to stop thinking about the future of publishing and think instead about the future of reading.

So true.  We spend so much time thinking about how to port from print to e- and other quick-and-dirty solutions.  We're so focused on how publishing works today and not spending enough time thinking about how reading has changed over the past several years and how it's likely to evolve in the future.

Here's a subtle example.  At the recent BEA conference Smashwords founder Mark Coker had an interesting exchange with a Penguin executive.  (That's "Penguin" as in the publishing company, not the hockey team, btw!)  I retweeted his summary of how the exec asked if Smashwords supports DRM, Mark said "no", and the exec asked if he'd like his card back.  Nice.

The Penguin exec is focused on the current state (and what he thinks will be the future) of publishing, not the future of reading.  DRM is the technology equivalent of a dead man walking.  Customers don't like it and they don't want it, so why continue pushing it?  DRM is not about the future of reading.

Publishers who focus on things like DRM and not on the future of reading will struggle mightily in the future, and the future is already happening.  Those who get too caught up in the way they want things to work rather than what readers want had better change soon.

Bloggers at Firebrand's BEA Booth

I'm not heading to BEA but if you are be sure to stop by the Firebrand Technologies booth (#4077) to meet some of the industry bloggers they've lined up for the event.  A full schedule of which bloggers will be there throughout the Expo is available here.  I think you'll agree it's a very impressive lineup.  And if that's not enough to get you to stop by, Firebrand is also raffling off a Sony Reader, so be sure to hit their booth and tell Fran Toolan I sent you! ;-)

Lessons Learned from "How the Mighty Fall"

I'm a big fan of earlier books by Jim Collins, particularly Good to Great.  When I saw the latest issue of BusinessWeek featured an excerpt of Collins' new book, How the Mighty Fall, I couldn't wait to dig into it.  What I discovered was not only another great work but also confirmation of a point I made in this earlier post about how/when we'll evolve past the "book".

How the Mighty Fall doesn't release till tomorrow, so if you want to get the scoop today you're pretty much limited to this excellent excerpt (more on that in a moment).  And although I was interested in grabbing the Kindle sample as a preview, well, the publisher apparently isn't planning to release the book on the Kindle.  Doh!

If you read through that BusinessWeek excerpt you'll find it's written in the same great storytelling style that made Good to Great so successful.  You'll also see that Collins has determined there are 5 stages of decline and that "companies can be well into stage 3 and still look and feel great."  You'll read a summary of each of the stages and you'll probably stop and think every so often about how each of these stages apply to your company.

In short, it's a terrific excerpt from what looks to be a great book.  But now that I've read the BusinessWeek excerpt, I have zero interest in buying the book.  I feel like the 20 minutes or so I spent reading that BusinessWeek piece has provided me with all the insight I need on the subject.  IOW, Collins did too good of a job on this excerpt, and that brings me back to that earlier post...

In a few short pages the author managed to convey all the key information that's spread across this 240-page book.  OK, I'm sure there are other stories and interesting tidbits that appear in the book but didn't make the excerpt, but so what?  I now know the details of the 5 stages of decline and, since I'm already way behind in all my other reading there's no way I'm going to bother buying this one.

I don't know what kind of payment author/publisher got for this BusinessWeek excerpt but I'm sure the visibility will help sell more copies of the book.  That said, I also think this particular excerpt is an excellent example of how a "book" could be repackaged and sold in a smaller, shorter, more efficient format.

Had it not already been made available via BusinessWeek, I would have gladly paid $9.99 for this excerpt.  How many other business books out there could be shortened and sold in e-format like this?  Yes, I'm aware of getAbstract and Business Book Summaries.  The former is good, the latter, not so much, but neither can compete with a high-quality excerpt like this that's written by the author himself.

Why $9.99 Won't Always Be an eBook Pricing Ceiling

Have you stumbled across any of those Kindle owners who get angry anytime they see an ebook price over $9.99?  How about publishers who insist on maintaining their print list price for the e-version?  Btw, for the record, where I work we typically fall somewhere in between; our "digital list price" is generally less than the print list price and, of course, Amazon is free to discount to an even lower price.  As a consumer, when I see a Kindle price over $9.99 I'm highly likely to skip it.

Whether we want to admit it or not, Amazon is carefully training us to think of $9.99 as the "right price" for a Kindle book.  We can jump up and down and scream at the top of our lungs that "the intellectual property is worth far more than $9.99" but that doesn't change the perception that $9.99 is a ceiling for a lot of people.  So should we all just hunker down and figure out how to make money in a $9.99 (or less) ebook world?  No!

Here's the problem: In 2009 Kindle editions are nothing more than quick ports from the print edition.  As a consumer, I see no value added and I rarely (if ever!) see how the publisher is taking advantage of the medium to offer me something that's better than the print edition.  In fact, the DRM that's wrapped around most Kindle editions means I can't pass the book along to someone else, so that makes the product worth even less to me. (Also for the record, at O'Reilly we're proud to say that we sell all our ebooks DRM-free.)

So what's the solution?  Figure out how you can add value to the ebook.  Leverage the medium!  As long as you keep looking at ebooks as incremental to the print business you're much less likely to make the investments there that are required.  Quick p- to e- ports will cast off revenue that's nothing more than a rounding error to your print business.  If you're OK with that, well, that's your problem!

I'm convinced that one day we'll look back at this $9.99 ceiling and the limitations of the early e-reader devices (current generations of Kindles, Sony Readers, etc.) and chuckle.  Rich products that fully leverage the platform they're delivered on could be priced much higher than $9.99 and potentially even higher than the current print pricing levels.  The future belongs to the publishers who are willing to invest in products that aren't just quick-and-dirty p- to e- conversions.

P.S. -- Amazon hasn't exactly developed an "insanely great" platform for us to make excitingly rich Kindle editions for, have they?  And although that platform has been around for about 18 months now I can't say I've seen much progress on this front.  That's yet another reason why I wish they'd open things up like Apple has done with the iPhone.  Sure, Apple still controls the platform but look at the awesome lineup of third-party apps that have resulted from their approach.  And I'll bet the iPhone OS 3.0 update due later this summer will live up to all the advance hype.  How come we never see sexy platform updates like that from Amazon?

When Will We Evolve Past "Books"?

As I browsed the latest Kindle bestsellers to decide if anything was worth purchasing I found myself asking this question over and over: Does the author really need 300 pages to explain this concept?  I can't tell you how many times I finished a book and felt frustrated that the 3 or 4 key learnings I came away with could have easily been boiled down to a few pages.

Part of the problem is the physical presence a publisher (as well as author and bookseller) feels a book needs to have on the shelf.  Imagine a book like Freakonomics as a 40-page work instead of a 336-page one.  I read that one though, and despite the fact that's it's a terrific book, the authors easily could have condensed it down to about one-tenth its length.

You might say that a good book is all about storytelling and I don't completely disagree.  Freakonomics is loaded with great stories, btw, but a 40-page version would have been just as effective at conveying the key points.  And frankly, most lengthy business books don't have much of an engaging story to tell at all; the authors just go on and on, seemingly in an effort to puff things up to 300 pages or so.

A 40-page version of Freakonomics would be lost on the shelves.  Couple that with the theory that no one is willing to spend $25 or $30 on a "business book" and you now know two of the key reasons why these things all have very similar form factors.

That's how the market has operated up to now, but how will it work in the future?  The more we move from print to e-books the less important something like spine width becomes.  There's no shelf to have a physical presence on, so why force every business book to be 300-400 pages?

How about the price?  Would you pay $25 for something you could read in well under an hour?  I would, especially if it delivers all the knowledge that's so diluted across the 300-400 pages we have to read through now.

I can see a model where the typical work is longer than a magazine article but much shorter than a book.  In fact, I think that's the sweet spot for the future.  A magazine article (2-3 pages) typically doesn't allow for enough space to adequately cover many of the topics you find in business books today, but I'll bet 30 or 40 pages would do the trick, and many authors might not need that much space.

So what will we call these products?  A new name is required.  They're not books and they're not articles.  There's no elegant way to splice those two words together so I think we'll have to come up with something brand new.  In the mean time, I very much look forward to the day when these new products dominate the market and we're no longer forced to read 300 pages to gain 30 pages of insight.  I know I'll read much more in that world.  How about you?

P.S. -- I realize this model doesn't work for all types of books.  For example, fiction is definitely all about storytelling and doesn't apply.  Then there's the world of how-to books.  I'd argue this model isn't ideal there either.  In fact, I believe a totally different e-model will evolve there over time, one without boundaries and something that takes us in a totally different direction...but that deserves its own separate blog post, so stay tuned for more...

CEO Roundtable Panel from O'Reilly's TOC Conference

One of the highlights from my first six months with O'Reilly Media was the opportunity to lead a CEO Roundtable panel discussion at our Tools of Change conference earlier this year.  The panel consisted of the following CEOs:

Eileen Gittins, Blurb

Michael Hyatt, Thomas Nelson, Inc.

Bob Young, Lulu

Clint Greenleaf, Greenleaf Book Group

Tim O'Reilly, O'Reilly Media, Inc.

If you were unable to attend the conference or this particular session, spend a few minutes listening to the vision of this great team of CEOs:

Amazon vs. Google

The Kindle 2 Review blog posted an article today comparing Amazon and Google.  It focuses on how the companies are going head-to-head, primarily in the book space.  I can't say I agree with 100% of the article but I'll admit there were pieces of it that made me think a bit further about the rivalry.

I'm still scratching my head over this comment about Google though:

The crucial thing here is that most people have no idea what the free services are costing them.

Come on.  I'm no Eric Schmidt fanboy (is there such a thing?!), but I get a chuckle out of conspiracy theories like this.  What exactly are these free Google services costing me?  It this is a hint that Google is to blame for the rapid decline of the newspaper industry, well, cry me a river!  I'm in the technology how-to book publishing industry and as I've often said, my biggest competitor isn't another publisher...it's Google.  But I'm not going to sit around and whine about how big, bad Google is forcing our industry to innovate.

I'm also not convinced that the book industry is a high priority for Google.  Would they like to participate in it more?  Absolutely, but it's not likely to become an enormous revenue generator for them, particularly compared to the money Google rakes in from search.  Then again, wouldn't it be interesting if Google were to come out with their own ebook reader?  Think about an open platform that encourages third-party app development and gives Amazon more than a run for its money.  Now that's something I could get excited about!

Why Aren't Magazine Publishers Thinking About This Stuff?!

I let my Sports Illustrated subscription lapse awhile back but my wife was kind enough to renew it last year for my birthday.  While catching up on my SI reading tonight, I happened to notice all the references inside to si.com/vault.

Have you seen that site?  If not, take a look.  It's a full archive of SI and it's freely accessible to everyone, even if you're not a subscriber.  I've been doing searches on it for the past hour or so and I'm rediscovering all sorts of great SI content from when I was a kid.  I could probably waste away the rest of the night searching for things like "70's Pirates", "Roberto Clemente", etc.

OK, it's not that uncommon for magazines to open their archives like this, so what's the big deal?  I don't have all night to search and read this stuff.  Why doesn't SI marry this content to an e-strategy that they could further monetize?  How about letting me search for "Roberto Clemente" and offering to create a PDF, an EPUB or a mobi file I can pull down to my computer, Kindle, Sony Reader, etc.?  Go ahead and include the ads -- I'm fine seeing them in here.  Or, sell it to me ad-free for $4.99.  I'm not going to sit and read this on my computer for hours but I'd love to have it on my Kindle where I'll read every last word.

SI publishes a variety of books built off content that was published in their magazine long ago.  They have "best of" books on all the major sports.  Why not let me create my own based on the writers or topics I'm most interested in?  Steve Rushin was my favorite sportswriter, but he "retired" a few years ago.  I'd love to gather all his articles into a Kindle book.  I'd even be willing to break my $9.99 Kindle price ceiling for something like that!

Then there's the gift angle.  Wouldn't it be cool to create a custom e-book of SI content for the sports-lover in your family?  Think about the Father's Day promotions they could do around this.

So again, I'll ask the question, why aren't magazine publishers thinking about this stuff?  They seem to be heading down the same rat hole the newspapers have gone down.  Quit whining and start leveraging your content archives!!!

Guest Post from Anthony Policastro

Anthony Policastro has been regular reader and frequent commenter on my Publishing 2020 blog.  He recently launched a blog of his own called "The Dog is Chasing Ghosts."  The blog's subtitle is, "What Every Author Needs to Know about Online Marketing and then some."  He explains the meaning behind the interesting title in this guest post:

Every so often, our labradoodle, Nickie, will confidently stare into a corner of a room with no windows and bark repeatedly for several minutes.

"What is the dog barking at?" my wife would ask.

"Ghosts. I think the dog is chasing ghosts." I say.

She raises her eyebrows and her face says, "maybe," and the dog stops barking and we go about doing whatever it was we were doing.

Whether my dog is barking at ghosts or not, something is there, something triggered the keen senses of the my pet whether it was a sound, a smell or a noise.

The Internet is similar in that of all the millions of users out there, you can't see them or touch them, but you know they are there. And if you are involved with the Internet with a website, a blog or paid advertising, everyone wants to attract as many users as possible to visit our websites, read our blogs or buy our products.

So like my dog, Nickie, we too are chasing ghosts whether you want to call them that or not, but we don't want to chase them away - we want to invite them in.

And that is the hard part and that is what this blog is all about.

Anthony is one of the more insightful publishing industry people I've come across over the past few years.  I just grabbed his blog's RSS feed for my KindleFeeder service and I would encourage you to subscribe as well.

P.S. -- He's on Twitter too.  Follow him here.

Revenge of the Independents?

I initially read this blog post by David Leach a couple of nights ago but I've been thinking about it ever since.  In his post, Leach speculates that the era of the big box book retailer is ending and the independents will rise again.

His argument makes a lot of sense.  Everyone's (supposedly) up in arms about big companies and corporate greed.  Additionally, we'd all love to go to a store that's the equivalent of "Cheers", where everybody knows your name.  You don't get that feeling at a big brick-and-mortar store today, so could the indies make a come-back?

Maybe, but I don't see it happening the way Leach describes it.  First of all, I have a hard time envisioning a bunch of new independents investing in and building up storefronts around the globe.  The momentum here still seems to be tilting more towards online than in-person, and that's where I believe the opportunities await.

What if there were a hundred mini-Amazons, each with their own area of specialization?  When I go to Amazon now I stumble across reviews from customers with similar interests but I don't really run into the customers themselves.  The experience is also completely void of any personal interaction.  Everything needs to scale, so it's totally automated.  But what if these micro-indies approached things differently?  What if there was more of a personal experience even though the browsing and buying is conducted online?

When I buy online I tend to look for the same primary benefit I do at a brick-and-mortar: who's got the best price?  I see myself evolving a bit on this front though as personal service is starting to mean more to me, even when purchasing low-priced products.  I enjoy reading sports books.  Could I be lured away from Amazon's low prices to a micro-indie site that has more of a personal feel, treats me like a human and not a credit card number, enables me to chat with fellow customers, chat about last night's game, razz the other teams fans, etc.?  Yeah, that formula could easily change my buying habits.

There's another key point in Leach's post that you may have missed when you read it.  He asks a couple of incredibly important questions:

What if there were no more bookstores and no more book-only websites?  How would we market and sell our books?

Wow.  Now that's an interesting scenario to ponder.

The obvious answer is for the publisher to establish a direct relationship with their customers.  That's always been a trick proposition though as most publishers are worried about alienating their retailing partners.  Even though I fully expect bookstores to outlive me, I also believe that publishers who expect to thrive in the coming years must figure out this direct-to-customer model.

Thoughts on eContent, Free Content and Pricing Model Options

I've been meaning to link to this Read-it-First article from Book Business but it didn't appear on their website till recently.  Now that's it's up I would encourage everyone in the publishing world to read it.  It's an interview Matt Steinmetz did with Matthew Baldacci of St. Martin's Press and it talks about an initiative to let readers "try before they buy."  The program reminds me a bit of DailyLit and it's interesting to see that they've quickly gone from zero subscribers to about 15,000 with a goal of reaching 100,000 soon.

This program stands out to me because St. Martin's is doing something every publisher should be involved with: finding new ways to reach their audience.  We're living in a rapidly changing marketplace and content sampling will only grown in importance as more and more devices take hold.  I'm not just talking about the Kindle and Sony Reader, btw.  Thanks to the iPhone's success, every cell phone maker is waking up to the App Store model opportunities.

If you're a publisher, what are you doing to build on-ramps to these new devices?  And are you thinking about more sampling options?  If you're an author, you should ask your publisher what their plans are for e-content, sampling, etc.  I'm proud of O'Reilly's efforts on this front.  You can follow the developments on our website as well as the O'Reilly Radar and TOC blogs.

One of the toughest issues to resolve hinges on pricing.  What's an eBook worth?  That's the question posed in this SF Signal blog post.  Even though the blog and the question are framed around SF, many of the comments apply to numerous genres.  Here are a few comment excerpts and my thoughts on each:

I will not pay hardcover prices for an eBook. It isn't the same. I buy books for the shelves, and will pay more for collectibles. I buy eBooks to read; they are not the same.

I'm amazed at how many publishers still think they need to charge the same for an eBook as they do for the print version.  The typical agrument goes something like this: "We don't want to cheapen our IP just because it's presented in a different format."  While this might, and I emphasize might, apply to a very small number of products, you've really got to think about the usability issues involved.  For example, a lot of complaints are made about how a customer can't pass an eBook along to a friend after they read it.  (Watch for that limitation to change at some point, btw.)  But I feel that as long as we're talking mostly about quickie ports from print to e-format, with no added value, you're probably looking at a lower price for the e-version.  The key here is to start thinking about how to add value to your content and take advantage of the e-platform.  That's where the new riches will be found.

And no stinking DRM, either, please!

Amen!

Take the cost of a paperback, subtract out the cost for printing and distribution and you are left with royalties for the author and some markup for the publisher.

Regardless of whether you agree with the previous statement, and I admit that I don't, you still have to acknowledge that this point of view is pretty common out there.  Perception is reality and this statement must be carefully considered.  I'd like to think that my team and I represent something more than "some markup" though.  There's a lot of work that goes into crafting most books.  A short list of important steps would include the development of the outline with the author, the massaging of the manuscript by a development editor, the copy edit and clean-up that makes it much more readable or the page design and layout efforts that also improve readability.  That's a lot to cover in a "markup for the publisher."  But again, until you can add more value to the e-version you'll probably be stuck fighting this uphill value proposition battle with your customers.

If printed books were to disappear outright, well, then some other method of covering the hidden costs of acquisition from authors, editing, promotion, etc., must be covered and unit prices for audio and e-books would naturally rise as a result.

Very insightful.  For the time being, most publishers treat eBook sales as a bit of an afterthought, mostly because they typically represent such a tiny percentage of the publisher's overall sales.  This allows the publisher to absorb many of the expensive editorial and production steps on the print side of the P&L.  But if print revenues decline, those expenses have to be recouped somewhere else.

If Amazon really wanted to get people onto the Kindle, they would offer backwards compatibility/customer incentive. By that I mean that the registered buyer of a book on Amazon.com would also get a Kindle copy that they could read on their Kindle device, iPhone, or desktop app. Books aren't like CDs where you can put all of your existing music on your iPod.

I've been lobbying for this since the dawn of the Kindle.  The problem is, I'm not sure many publishers or authors would buy into the idea.  But it sure would help drive more interest in the Kindle!  How about a compromise solution?  What if Amazon were to offer you the Kindle version of the book for $5, or about half the going rate, when you buy the print version first?  There have got to be some interesting bundling models here that have yet to be tested.

Btw, I'm a consumer who's also frustrated with this issue.  As I mentioned in a tweet the other day, it seems like most of the books I'm looking for on the Kindle aren't converted (yet?), and many of the ones that are now have prices over $9.99.  I've never bought a Kindle book for more than $9.99 and unless there are some interesting bells and whistles that come with it, I'm not sure I ever will.