Lessons learned at Book Business Live

The team at Book Business recently hosted a one-day, invite-only event in NY. I had the pleasure of attending as well as moderating the first panel of the day, Transforming Your Company for the New Era of Book Publishing.

The day was filled with highly engaging discussions featuring panelists from McGraw-Hill, Pearson, Hachette, Cengage, Perseus, Rodale, HarperCollins and Scribd. Here are a few of the most interesting points I took away from the event:

Direct-to-consumer (D2C) and competitive pricing – Towards the end of my session an audience member asked our panel the following question: How is it possible to build a direct channel when Amazon is always going to at least match, if not undercut, your prices? Clancy Marshall of Pearson provided a terrific response. She noted that her team is focused on creating a broader, more compelling learning environment, not simply trying to sell a book at the lowest price. This is perhaps the most important thing for publishers to keep in mind as they build out their direct channels: It’s all about creating a reason for consumers to come to you, not simply trying to offer the lowest price. You’ll lose 100% of the time if you’re trying to build a D2C channel based solely on low prices.

What's next, now that ebook sales are flattening? Join me at a free webinar on April 28 to see how to drive revenue growth. Click here to register.

What are you going to do with that data? Tom Breur of Cengage told an interesting story of a correlation they noticed between text highlighting and student performance. They looked at the performance of students using a particular title and tracked how often the student tended to use the ebook’s highlighting feature. It turned out that students who highlighted more often generally got lower grades in the class. Their conclusion: Students who highlight are just skimming, not closely reading the text. The real question here is this: As you and your organization gather more data from ebooks, what will you do with that data? It reminds me of those registration cards that used to appear in the back of print books. I once worked for a publisher who had an office with stacks and stacks of those cards, carefully filled out and mailed in from their readers. The cards were just sitting there, taking up space and collecting dust. Gathering the data is just the first step. In the Cengage scenario, I’d like to think they’re developing ways for their platform to help highlight-happy skimmers become more engaged readers.

The lean model is alive and well – I almost stood up and cheered when Mary Ann Naples of Rodale mentioned their use of the lean startup model. We first started talking about the lean approach at Tools of Change several years ago and it’s great hearing that at least one publisher has fully embraced the concept. If you’re not familiar with the lean approach you’ll find all the resources you need here.

Indirect and direct can coexist and thrive – Mary Ann Naples also helped explain how a publisher’s D2C efforts don’t have to conflict with indirect/retailer channels. She talked about the importance of building community, something I believe is critical for publishers to create consumer brands, not industry brands. Further, she pointed out that a publisher’s community-building efforts help establish a compelling D2C solution while also helping their product stand out in the crowded indirect channels. In short, community can be leveraged to build a stronger consumer brand across all channels.

Focus on your biggest fans – I loved this point made by Rick Joyce of Perseus. He talked about how the music business is so good at selling more products to a band’s mega-fans. A broad consumer approach is fine but what about that portion of your list that tends to have the strongest following? It might be a particular series or author, for example. Are you creating the deluxe editions, the boxed sets, the must-have versions that those fans crave? And are you working with that part of your customer base to build the community foundation of your D2C efforts?

Kudos to Denis Wilson of Book Business and all the speakers who were remarkably transparent in their discussions and audience Q&A. If you ever have a chance to attend one of these Book Business events I highly recommend you make the time for it.

The evolution of ebook subscriptions

Today’s ebook subscription providers offer a nice value proposition for avid readers. It’s great that the all-you-can-read models from Oyster, Scribd and Kindle Unlimited provide consumers with something other than the print model where you buy one book at a time. Now the industry needs to think about how the subscription option can evolve further and enable even more interesting business models.

Think about books that tend to change frequently over time. Technology how-to guides and reference manuals are just a couple of examples. When I was a tech book publisher I often heard complaints from readers about how the book they bought last month is already obsolete. As the industry shifts from print to digital this is a great opportunity to create a one-book subscription: For $x/year the publisher offers to keep the digital edition up-to-date and the consumer is reassured they haven’t bought an obsolete product.

What's next, now that ebook sales are flattening? Join me at a free webinar on April 28 to see how to drive revenue growth. Click here to register.

Another approach is to look at small libraries of highly focused content. One of the things you’ll quickly discover with each of the current all-you-can-read models is that their depth on a particular topic is pretty limited. For example, as a baseball fan I can tell you that Oyster’s sports library is pretty shallow. The problem becomes even more noticeable this time of year when publishers are releasing a bunch of new titles for opening day; you typically don’t find many new releases in the ebook subscription programs.

Rather than leaving new titles out, why not feature them in a mini-all-you-can-read library for a topic like baseball? If one publisher has the title depth they could do this on their own. Most topics would benefit from a multi-publisher solution though. In that case, a provider like Oyster could offer this as an add-on to their current $9.99/month model. I would gladly pay an additional $5/month for access to newer releases of baseball books in my Oyster subscription. For those of you concerned that the monthly price is too high, think about what other add-ons could be featured in a program like this; once you know the subscriber’s preferences (e.g., baseball fan), it’s not too hard to come up with other digital goodies you could include to make the deal even more compelling.

Will the book publishing industry simply settle for the basic ebook subscription model we see today? That’s highly likely given the industry’s aversion to risk. It took the combined efforts of two startups, Oyster and Scribd, to get the publishers this far in embracing the subscription model. Let’s hope another startup comes along to take the model even further.

Is the Ebook Revolution Over?: Driving Ebook Growth as Sales Plateau

You knew it wouldn’t last forever. You expected the double-digit growth rates would taper off but you never anticipated your ebook sales would flatten out so quickly.

Is the ebook revolution over?  Is this as good as it gets for ebooks? Or is there something you can do today to generate ebook revenue growth like you’ve seen in the past?

To help answer these questions I'm pleased to announce a free Olive Software webinar I'm hosting which will show how publishers can grow their top line and, at the same time, wrestle back control of their business.  

Here are just a few of the topics we plan to cover:

  • Why the market is flattening out
  • What will drive future growth
  • It’s not print or digital; it’s print and digital
  • How indirect can help drive direct sales
  • The tools and techniques you need to succeed
  • How Olive can be your growth partner

Please join us at 1:00PM ET on April 28 for this 30-minute session – click here to register now, as virtual seating is limited. 

Content, technology and the digital scrapbook of your life

Every year it seems our cell phones take on new roles in our lives. Long ago flip phones merely enabled you to make calls. Today’s smartphones are loaded with sensors to do everything from track your health to tell you about a sale at a local store.

I think it’s time for our phones to do even more and this involves the convergence of content and technology to automatically create the digital story of your life.

Imagine an app that constantly monitors your phone’s location to do the following:

  • Log where you were today and make assumptions about what you did in each location,
  • Gather and organize content relevant to where you’ve been,
  • Build it all into a living, growing record that you can edit and share with others.

Sounds fairly straightforward, right? Now let’s think about the results of this.

One day you went to see the Reds play the Pirates in Pittsburgh at PNC Park. The app logs the event and pulls in the box score along with a couple of noteworthy articles about the game from the Cincinnati and Pittsburgh newspapers. It also saves the weather information (e.g., “partly cloudy, 61 degrees at first pitch with a high of 68 degrees”) and provides interesting factoids about what happened in sports on that same day 5 years ago, 10 years ago, etc.

On another day you attend your child’s college graduation ceremony. The app checks the school’s calendar and determines you were indeed at the ceremony. This information is logged and because the school was kind enough to expose the graduation program to the app, it too has now been digitally preserved in your stream.

By the way, this imaginary app also offers a user network. So it knows that you went with a friend to that baseball game, and your friend is part of the app’s network. This tidbit is also preserved along with all the great pictures you both took at the stadium. No longer do you have to worry about uploading or emailing photos; your app settings were already configured for two-way sharing between you and the friend who accompanied you at the game. The same goes for the graduation ceremony; now all your friends and family who are members of this service all have access to each other’s pictures.

We could, of course, extend this even further… If you ordered food at that baseball game the information could be logged so you could easily track your diet. In short, any transaction that takes place on your phone could be wired into this app as well. Those transactions that aren’t made with your phone could still be easily integrated: just take pictures of the receipt and the phone does the rest.

The app’s goal is to provide every user with a digital scrapbook of their life. The key is to automate as much of this process as possible. Let your phone and the app figure out what to collect and you can always go in and tweak it later if you want.

There’s also an enormous content opportunity here. I mentioned how the app pulls in content from newspapers but, of course, the feeds could come from anywhere. Ultimately this is a way to redeploy content based on context and preserve it for years and years. After all, one of the reasons you want to gather this information is to remember and relive the events of last week or last year. It’s also an interesting way to build the story of your life, one that can be passed on from one generation to the next. I’d love to have this kind of information about my parents and grandparents, for example.

A variety of business models could be used here including free, advertising/sponsor-based and premium. Ancestry.com and other genealogy services have proven the interest we have in our past. People spend hours and hours sifting through all that historical data, making assumptions about family connections, how people met, etc. An app like this eliminates the guesswork and tells the life story you want to communicate with your friends and future generations.

How digital can be a companion for print

Congratulations, print publishers. You dealt with enormous disruption these past several years and you managed to avoid the same fate as your music industry counterparts. For example, most book publishers still generate 70-80% of their revenue from print. How many music labels can say they generate anywhere near that percentage from CDs?

Is the survival of print a good thing or a bad thing? Rather than worrying about that one, here’s the question we really need to think about: Why do we treat these two formats as mutually exclusive?

Depending on what they’re doing, why do consumers tend to use either print or digital but almost never use print and digital for the same product?

I’ll use myself as an example... Believe it or not, my wife and I still subscribe to our local print newspaper, the Indianapolis Star. Our subscription plan includes a digital version as well as print. When I’m at home I always read print and never bother opening the digital edition; when I’m on the road, of course, I’m limited to a digital-only experience.

Why do I never bother opening the digital edition when I’m home? Because it’s just a digital replica of the print edition I read over breakfast. OK, there might be a few extra bells and whistles in the digital edition but they’re not significant enough to get me to open the app after I’ve read the print edition.

The same is true for books and magazines. Digital simply replaces print, so there’s no reason to use both formats for any given title.

I think it’s time to reimagine digital as a companion to print, not simply a replacement for it.

Today’s digital editions are nothing more than print-under-glass. They’re digital replicas of the print product. As a result, we tend to buy one format or the other, but rarely both.

I used to publish technology books for IT professionals. Many of those books on programming languages and productivity tools had companion websites. The websites offered additional content, sample files and other goodies that didn’t come with the book. These sites also represented a way for the publisher to dynamically extend the original content with additional elements and coverage, some of which might not have been available when the book was originally published.

I’d love to see the industry evolve to the point where each print product has a digital companion, not just a print replacement. The digital companion would extend and enhance the print experience and would be an optional add-on to the print product. Some of these digital companions could be free but the more valuable ones could have a price.

Btw, publishers could offer these companions exclusively on their websites, converting print customers who bought from Amazon and elsewhere into direct customers. Promote them in the print product and bring those customers to your website where you can build a direct relationship, up-sell, cross-sell, etc.

A couple of weeks ago I wrote an article called Why Johnny doesn’t like e-textbooks. Maybe Johnny doesn’t want the print-under-glass digital edition of the textbook, but I’ll bet he’d be interested in a digital companion for the print textbook featuring notes from other students, cheat sheets for test prep, sample quizzes, slide decks from class lectures and better explanations of key topics from other students and teachers.

Textbooks aren’t the only products that could be further monetized with digital companions. Just about any type of content lends itself to digital extension and enhancement. We just need publishers and authors to start thinking of digital as a companion for print, not simply a replacement.

Finding the optimal streaming content value proposition

Have you paid much attention to the various pricing options used in the streaming content space? A recent article on re/code talks about the challenges the music industry faces as it wrestles with free, ad-subsidized streaming services. In short, the article says free is bad and paid is good. I’d add that’s true for everyone but the consumer, of course.

The problem isn’t perhaps so much about making free go away but rather making the paid options much more compelling.

For example, I’m a big fan of Spotify. At first I just used the free, ad-based version and created a bunch of playlists. The ads didn’t seem too intrusive but when I saw the opportunity to try a three-month, 99-cent trial of the paid version I couldn’t resist. For less than a dollar I could eliminate the ads and download as much music as I want to each of my devices.

I use Spotify much more frequently now but the three-month trial is about to end. Am I so hooked on the Spotify Premium that I’m ready to fork over $9.99 per month going forward?

No way.

Even though $9.99 sounds like a bargain that’s still about $120 per year, much more than I’m willing to spend for the service. Spotify would have better luck converting a freeloader like me if they offered something in between. For example, I’d sign up for $2.99/month for an ad-free version with no download capability. And I’d consider signing up for $4.99/month for downloads and no ads. They’ll probably never see another nickel from me as long as the options are limited to free and $9.99 though.

Spotify’s problem is the free version is just too darned good, at least for me.

This challenge isn’t limited to the music world though. My wife and I share a Premium subscription to Next Issue, the all-you-can-read digital magazine service. We pay $14.99/month for unlimited access to more than 140 magazines. At first it seemed like a great deal but I’m opening the app less frequently every month and $180/year is starting to feel quite expensive. The other challenge here is that with the right combination of bookmarks, alerts, newsletter subscriptions and RSS feeds, it’s possible to gain free access to most of the content I’m paying for via Next Issue. As a result, our Next Issue subscription is likely to end soon.

Let’s compare that to Oyster, the all-you-can-read ebook service. Once again, my wife and I share a $9.95 subscription and we couldn’t be happier. I’d probably be willing to pay even more than that and I figure the price will go up before too long because Oyster’s business model isn’t sustainable at $9.95/month. But there’s no legal free alternative to this ebook content, so Oyster has much more leverage than Next Issue when it comes to the threat of “free” cannibalizing “paid.”

If you’re thinking of jumping into the streaming content marketplace, be sure to study the results of comparable existing products and make sure your free option isn’t so good that most consumers will never consider upgrading.

Why Johnny doesn’t like e-textbooks

A recent article in The Washington Post explained why most students prefer print textbooks over their digital equivalent. There’s no disputing the fact that print still dominates the textbook sector. That article correctly identified the “what” but I’m not convinced they thoroughly uncovered the “why” behind this phenomenon.

Here are a few key points I don’t think the article explored:

Students grow up with print – Today’s college kids might be the most digitally active ever but they grew up using print textbooks. Print books have been a critical component of a millennial’s study life, so what makes anyone think a student will magically shift from print to digital when they get to college? Today’s college students simply aren’t digital natives when it comes to textbooks.

E- is just like p-, but with fewer benefits – Why would they want to switch to e-textbooks anyway? I know there are some exceptions but when you get right down to it the e-textbook has fewer benefits than the print version. Here’s one great example: Sharing. Plenty of college students (my own kids included) have managed to save a few bucks for beer/pizza by sharing print textbooks with friends taking the same class during the same semester. Good luck trying that with an e-textbook.

Prices – Speaking of fewer benefits, is there really a financial incentive to go with the e-textbook over the p-version? I’m not talking about e- being marginally less expensive than p-. Think about the huge impact the $9.99 price point had on the broader ebook market when the Kindle first arrived several years ago. Here’s a (pardon the pun) textbook example: This Calculus book is available as a new product in print from Amazon for $264. The Kindle edition is $230, a whopping savings of just under 13%. Really? And we expect student so go with the Kindle edition that they can’t share but still costs more than $200?

Debunking distractions – The Washington Post article notes that distractions are inevitable on the digital screen and how distractions are one of the reasons students prefer print editions. How many of those students reading print textbooks also have a smartphone right next to the book? They’re not distracted by the flashing and ringtones it puts out? Please. That said, if today’s college students are so easily distracted by Facebook and pop-ups I think it’s safe to say society is doomed.

User experience – Let’s also not overlook the device these e-textbooks are most likely to be read on. Pretty much every college student these days has a laptop and a phone; fewer have a tablet. So if they want to read their e-textbook most students are stuck reading it on their clunky laptop. The phone experience is awful for larger format, fixed-layout textbooks and probably not that effective for reflowable ones. I’d prefer print as well if my options were limited to the e-textbook on a laptop or a phone.

Dumb content on smart devices – This, I believe, is the most important point of all. Most of these e-textbooks are nothing more than a print-under-glass experience. They’re a digital replica of the print edition with no real digital features. The Kindle editions certainly don’t leverage the capabilities of the smart devices they’re read on, for example.

Until the market evolves from today’s mostly print replica model and offers compelling reasons for students to go digital, including a more attractive price point, we’re unlikely to see movement away from print textbooks. And let’s face it… The major players in this space love the fat margins they’ve always generated from print products. Those same players have enormous control over the ecosystem so what’s their incentive to offer a more compelling product and value proposition?

How the Internet of Things (IoT) affects content

You’ve undoubtedly heard all the hype by now. Sensors will be everywhere and we’re about to sink in the sea of data they’ll produce. Don’t just view the Internet of Things (IoT) as how your coffeemaker connects to the web though. This phenomenon means so much more, especially for content creators and distributors.

Fast forward with me to a time where your car and house are connected via the IoT. You’ll no longer need to keep track of oil changes, tire rotations, furnace filter replacement dates, etc. You’ll have immediate access to all the particulars via a dashboard app or receive text alerts when something needs attention.

All that data will also help identify trends and the likelihood of something going awry. For example, based on your driving tendencies and those of thousands of other drivers, this data will help determine when you’ll need to perform future maintenance and repairs. These predictive analytics will help you avoid even costlier repairs down the road.

What does any of this have to do with content?...

I’ve just outlined a terrific opportunity for creators of how-to and DIY information. If your organization offers content for weekend warriors or anyone comfortable turning a wrench, well, the IoT could be a game-changer for you.

Those sensor vendors and app developers will want to offer more than just the raw data. The value of their products increases significantly if they can also help their customers with their maintenance and repair projects.

Think of this as a whole new distribution channel with plenty of interesting revenue model options. Freemium, premium, subscription, micro-transaction…they’re all viable models here, but don’t forget the need to share some of that new revenue with the companies providing the sensors and apps.

The IoT opportunity goes well beyond the examples I’ve mentioned here. Think about the type of content you produce and how sensors and the IoT will eventually open new doors for discovery and distribution. The possibilities are endless and the data is just the beginning.

Why today’s ebooks are like the golden age of radio

The date was April 8, 1927 and the front page of The New York Times featured this headline: FAR-OFF SPEAKERS SEEN AS WELL AS HEARD HERE IN A TEST OF TELEVISION. Click here to read a PDF version.

As I read that 1927 article I recently I couldn’t help but wonder how confused the public was with this newfangled television thing. After all, radio had been popular for several years and few probably even imagined the need for a more powerful and engaging communication and entertainment vehicle. In fact, the article notes the following:

The Bell Laboratories have been directed to concentrate on developing television with all possible speed, although the American Telephone and Telegraph Company has no idea today whether it will ever be commercially valuable.

So a new technology was invented, the public was curious but everyone questioned its viability.

Sound familiar?

We’re in the print-under-glass stage of ebooks today. The ebooks we read are nothing more than digital replicas of the original print product. They almost never take advantage of the powerful digital capabilities of the devices they’re read on. I often refer to this as “reading dumb content on smart devices.” 

Today’s ebooks are more or less at the same stage radio was at back in the 1920’s. Like radio in the 20’s, ebooks are still a somewhat recent success, particularly since the first popular e-reading device, the Kindle, is less than 10 years old. Today’s ebooks are easy to get comfortable with. They operate like we expect them to. But other than the content itself, the presentation of today’s ebook rarely surprises or delights; it’s basically a digital page-flipper of the print edition.

The market has experimented with enriched or enhanced content and the results have been weak at best. As a result, most publishing experts feel the future promises nothing more than the print-to-e editions we see today.

I couldn’t disagree more.

In April of 1927 television was viewed as a gimmick, a solution in search of a problem, similar to how anything beyond today’s static ebook is perceived. It didn’t happen overnight but television obviously got beyond the gimmick stage and became an enormous industry. I believe the same thing will happen with the next generation of ebooks, or whatever we end up calling them. Anyone who believes today’s ebooks are as good as it gets probably would have scoffed at television in 1927.

By the way, although that NYT article is almost 90 years old it’s important to note that radio hasn’t gone away. Listeners don’t spend anywhere near the amount of time with radio that they used to and families certainly don’t gather around radios for evening entertainment. But radio found its niche and didn’t disappear.

The same will be true not only for print books but for today’s static ebooks as well. Sometimes you just want to curl up with a simple story, no fancy digital device or web connectivity required. But there are plenty of other types of content and reading experiences that will dramatically benefit from moving beyond today’s print-under-glass model. That’s where the real disruptive opportunities await an industry that’s never been known for embracing change.

Data-driven content recommendation

Which is better at assessing your content interests: a display ad on a random website or the app you spend hours reading magazines in each month? If my recent experience is any indication, the display ad is the winner, hands down.

I recently went on audible.com to explore audio books and picked one I thought I might be interested in. I was curious to experience the purchase process but I stopped before clicking “buy.” Later that same day three different websites featured banner ads from Audible with the cover of the book I almost purchased. The digital breadcrumbs I left behind on my audio book experiment probably still exist somewhere deep inside my browser’s cache.

Compare that to the fact that I regularly read sports magazines in my Next Issue subscription. So why doesn’t the Next Issue app use that information to recommend other sports content to me, right inside the app?

The answer is pretty simple: Online advertising services leverage data but content apps don’t. It’s amazing that in 2015 so few publishers and content distributors are utilizing the valuable data they gather every day.

The opportunity here isn’t just to get me to read more related content in the app I’m already in. Yes, that will increase engagement and serve as a win-win for publishers and readers. The real upside is around discovery and affiliate income.

Once Next Issue wakes up and starts recommending more sports content from its other magazines they should also recommend books in the same category. I’m not keeping a close eye on the newest ebooks about baseball and hockey, but Next Issue knows I read a lot of articles about both, so why not use that information to give me a heads-up about books I’m likely to be interested in?

This would be a terrific opportunity for book publishers to create an affiliate program within the e-zine app. Book and magazine publishers aren’t direct competitors, so why not work together to provide reading recommendations?

This is a two-way concept, btw; ebook publishers should be willing to serve up recommendations to relevant magazine content as well. An affiliate cut of any new revenue generated from these recommendations would be passed along to the recommending app/publisher.

First we need the app vendors to recognize and tap into the valuable data that’s right under their noses. Then we need to tear down the walls that exist between publishers so that data can be used to improve discovery and generate additional revenue streams. It will be interesting to see who figures this out and builds a truly data-driven content recommendation service.