Joe Wikert's DisruptorFest

Which digital book format has the most growth potential?

The answer might surprise you…

Amazon’s Kindle format dominates the ebook market today and it’s easy to assume that will remain the case going forward. Despite that fact, I see a number of trends indicating the digital book space could be ripe for disruption.

Notice I use the term “digital book”, not “ebook.” That’s because the digital format with the most upside isn’t MOBI or EPUB. It’s audio.

Amazon also dominates the audio book space, of course, thanks to their ownership of both Audible and Brilliance Audio. Amazon’s audio book subsidiaries are built around yesterday’s business model though, and I believe technology and consumer habits have evolved to the point where a new business model will emerge.

Have you ever priced an audio book? Let’s use George Orwell’s 1984 as an example. Audible currently offers the audio version for $20.97 while Amazon sells the paperback for $11.42 and the Kindle edition for $9.99. There are exceptions, of course, but the audio format is typically the most expensive option.

What might happen if audio editions were priced at or below the print or Kindle editions? The recent trends in ebook sales might be a good indicator here. As ebook prices have increased over time (thank you, agency model), print has experienced a resurgence and ebook sales have flattened and even declined for some genres.

Next, consider the growing interest in podcasts, as described here. Two factors drive this trend shown above: convenience and laziness. Low-production YouTube videos have replaced how-to books on a variety of topics. It’s also a lot easier to watch or listen than read. I’m sure that last statement made quite a few of you bristle, but it’s true. Reading isn’t going away, but overall consumption could be dramatically increased if it weren’t for the painfully high price of your typical audio book.

Why are prices so high? The obvious culprit tends to be the professional talent (and additional time) required to create the audio format. But is it really critical to limit recordings to either the author or voice professionals? If you want to continue charging those high prices the answer is probably “yes.”

If you’re open to exploring other pricing models though, you’ll be inspired by the approach used by The Week. I recommend you subscribe or at least listen to a few of the podcasts created by The Week. You’ll quickly discover their editors and other staff members are the voice talent. The voices are clean and crisp, not robotic, and the finished product is terrific. Yes, these are free streams, but they give you a sense of what’s possible with a much lower investment.

Technology is opening new doors here as well. Remember the monotone, computer-generated audio of the 90’s? Text-to-speech has improved quite a bit over the years and will only get better over time. If you’re still not convinced, scan this related article and be sure to listen to some of the audio samples; it’s virtually impossible to distinguish the human-generated segments from the computer-generated ones.

Despite all this, why would publishers have any interest in seeing lower prices for audio formats? Because it represents an enormous opportunity to break the stranglehold Amazon currently has on all digital formats.

Imagine a world where publishers could establish a strong, direct-to-consumer (D2C) channel featuring audio. The D2C audio edition of 1984 could be computer-generated and sell for $9.99, the same price as the Kindle edition; but in this case, the publisher keeps 100% of the selling price, not whatever percentage they’re receiving from Amazon for the Kindle edition.

Are you worried that consumers will buy one audio copy and share it with all their friends? If so, please don’t fall back into that digital rights management (DRM) trap that only reinforces Amazon’s dominance. Rather, create a simple mobile app where all the purchased audio files live. Most publishers don’t realize it, but the fact that a reader’s Kindle files are buried in their app is more of a file-sharing deterrent than DRM itself. If you don’t believe me, ask a few of your friends if they even know how to retrieve their ebook files from their Kindle app, for example.

The opportunity here is huge, and not just for selling audio books directly. It’s a chance for publishers to forge a more meaningful, ongoing relationship with their customers. I’ve grown to love history books over the years, mostly ones about WWII and the civil war. I subscribe to a few publisher newsletters but I still sometimes overlook interesting new publications. Wouldn’t it be cool if audio samples of those new books could be sent directly to the app on my phone? I just set a few preferences and I’ll never miss another new title.

Today most publishers sell transactionally, one book at a time, to nameless/faceless consumers. The model I’m describing isn’t ideal for all publishers, but for ones with genre depth it represents a new approach where they could better serve their customers as well as take more control over their own destiny.

How are you connecting with your customers?

The people who actually buy and read books are still mostly nameless and faceless individuals from a publisher’s point of view. This, despite the fact that there are plenty of opportunities for publishers to establish a direct relationship with consumers. I’m not necessarily talking about selling direct; I’m referring to the opportunity to build a relationship with the people who open their wallets every day for your products.

This isn’t something that’s limited exclusively to ebooks, btw. In fact, the publisher-consumer relationship can be built via print books as well.

What’s the first thing consumers see when they open one of your books? Most of the time it’s the book’s title page. What a waste. If you just bought a book and are about to start reading it, do you really need to be reminded of the title? I’m sure this violates the core of The Chicago Manual of Style and a slew of other publishing references but what’s wrong with publishers offering a simple “thank you” message on that first page? Something like:

Thanks so much for your purchase. Be sure to register your book at www.publisherwebsite.com for free membership in our reader club where you’ll get early access to new titles and opportunities to meet your favorite authors.

Step one is to convert that anonymous consumer into a real person. But don’t just make some lame request for them to hand over their email address. You’ve got to give them compelling reasons to connect or they’ll simply ignore you.

I mentioned “early access to new titles”. What does that mean? I’m suggesting that publishers offer samples of new publications exclusively on their website or via email through free membership programs. Amazon typically doesn’t offer the ebook or e-sample till the print book publishes. Why not take advantage of the period between when the sample is ready and the book is released to encourage consumers to join your membership program or visit your site? And if you do this, be sure to remove all DRM from those samples; after all, the goal is to encourage sharing of that content, not lock it down.

I also mentioned how a reader club could provide ways for consumers to meet authors. Author webinars are one option and you could make them available exclusively to members. Those tend to be one-way conversations though, so how about adding a few more intimate virtual events with no more than 10-12 attendees? Lucky winners would be randomly drawn from the membership base and earn the opportunity to interact with authors via Google Hangout or any of a number of other virtual platforms.

Exclusive content is another way to drive consumer engagement. Would your authors be willing to create short articles, videos, etc., that are shared via the membership program? I realize every author won’t be on board with this but the ones who will are the authors who understand the importance of connecting with their readers.

This sort of program could be used to drive more sales through all channels. If you’re interested in building a better direct channel though you could also offer a variety of discounts and other incentives to get consumers to buy from your site.

It’s amazing that in 2016 most publishers still act as if there’s no benefit in establishing a relationship with their readers. The reality is these same publishers are missing out on opportunities to expose more of their content to readers who already bought from them. And as the saying goes, maintaining an existing customer generally leads to a better economic outcome than trying to find and sell to a new customer.

How “Send to Kindle” can help neutralize Amazon

Publishers who sell ebooks direct to consumers typically do so in EPUB format. That’s because most publishers are still wedded to the false sense of security DRM provides and EPUB offers a popular DRM solution. Contrast that with Amazon’s format, MOBI, where Amazon is the only company who can apply and manage MOBI’s DRM’d files and settings.

A former colleague of mine and I used to get a kick out of reading the many painful steps readers are forced to go through when buying DRM’d EPUB files direct from publisher websites. It’s not uncommon for the process to require more than a dozen steps to proceed from buying to reading. Most of the process has to be endured once again if the consumer decides to start reading the same book on another device.

Click here or here to see the many hoops one must jump through to install DRM’d EPUB ebooks on one device as well as read them across multiple devices. It’s no wonder when you search for help on the topic the most popular links aren’t how to manage the process but rather how to remove the DRM and eliminate the associated headaches.

More and more publishers are starting to realize that DRM is pointless but they’re still missing out on one of the biggest opportunities of all: Putting their DRM-free ebooks into a reader’s Kindle library.

It’s no secret that Amazon dominates the ebook marketplace. Most readers have built a substantial Kindle library and the last thing they want to do is create a new library outside the Kindle ecosystem. They simply want all their books in one place.

Amazon’s Send to Kindle functionality has been around for quite awhile and I believe it’s one of the most underutilized services available to publishers. The Send to Kindle email option lets publishers push non-DRM’d ebooks directly onto a consumer’s Kindle bookshelf. I’m sure it was originally designed for documents other than ebooks but I think it’s time for book publishers to take advantage of it for their ebooks as well.

In addition to simply selling EPUB or PDF ebooks, why not provide readers with the MOBI version and push them directly onto their Kindle devices and apps? All you have to do is ask the reader for their unique Kindle email address and then have them enable inbound emails from your domain. Once that’s in place you’re able to place the ebook on their shelf just like Amazon does.

Once you’ve established that direct relationship with the consumer and their Kindle account, why not ask them if they want to opt in to receiving future related ebook samples from you? They’ll no longer have to search for similar books from your list as you’ll be able to automatically push samples to the reader’s Kindle bookshelf as they’re published. Take it a step further and make your samples available via this service 30 days before they’re available anywhere else. Get even more creative and offer a random free ebook prize to some number of lucky winners every month. There are plenty of ways to make Send to Kindle work for you and your customers.

It’s all part of creating a compelling reason for readers to come to you, the publisher, rather than always relying on retailer partners. Used wisely, the Send to Kindle service can help neutralize Amazon’s dominance while also helping publishers establish a better direct relationship with their customers.

My 2016 ebook marketplace hopes and wishes

Rather than speculate on what might happen in the ebook sector this year I thought it would be wiser to simply list the developments I’d like to see. So although some, and perhaps all, of these are a long shot, here’s my short list of hopes and wishes for the ebook market in the New Year:

Less DRM – Publishers continue to be their own worst enemy with digital rights management. It’s part of what makes it so hard for publishers to create an effective direct channel and it provides nothing more than a false sense of security. As I’ve said before, if a reader really wants to unlock and share an ebook there are a number of freely available DRM-removal utilities that are just a few clicks away. Plus, most readers have no idea where their mobi and EPUB files are stored on their devices; those who do know the location probably already have a DRM-removal tool on their computer.

Better direct-to-consumer options – Once a publisher abandons DRM it suddenly gets much easier to create a frictionless direct-to-consumer (D2C) solution. And of course I’m not suggesting publishers should abandon retailers. But it’s time for publishers to diversify their channel strategy and focus more on the one channel they have 100% control over: their D2C channel. As I’ve said before, don’t assume “if you build it, they will come.” You need compelling reasons for consumers to buy direct (see here, here and here, for example).

New, sustainable unlimited ebook subscriptions – My Oyster subscription expired a few days ago, consistent with the sunset plans Oyster announced a few months ago. Oyster itself is about to expire soon, the victim of an unsustainable business model. The all-you-can-read subscription model is not dead though. I’m convinced the way forward is with topic verticals such as sports, religion, cooking, etc. They need to offer more than long-form book content and they need to focus on building community. Think “membership” and the old AMEX line, “membership has its privileges.”

Better notes and annotations, outside the book – I’ve read quite a few ebooks over the years and I’ve highlighted a lot of passages. I’ve also added notes to several, but not as many as I should have. The reason I haven’t annotated more is because I know those notes are stuck inside the book. I want a quick and easy way to export my highlights and annotations, collate them into other documents and make them fully searchable. For example, I’d love to see ebook applications embrace Evernote functionality, making it super easy to sync all my highlights and annotations to an Evernote folder.

I hope we see progress on all of these fronts in 2016 and I hope that the New Year is a wonderful one for you, your family and your organization.

The ebook value proposition problem

My youngest daughter asked for a Harry Potter boxed set for Christmas. As I wrapped the heavy, bulky package I kept wondering why she didn’t opt for the ebook collection instead. On Christmas morning I learned why: each title in the boxed set comes with a new cover. Actually, they were supposed to have new covers but we got the wrong box, so the heavy, bulky package is about to be returned.

My daughter reminded me that ebooks are often inferior to print books. In this case, she values the ability to showcase her collection, something you just can’t do with ebooks. When we finally get the right set I’m sure she’ll smile every time she looks at the box on her shelf.

Let’s compare that to the ebook experience. My collection is a library buried deep within my iPad. When I look at my iPad I don’t smile…I just wonder if it’s fully charged for the day ahead. And although services like Goodreads can fill the digital void and help you show off your print and ebook collection, I stopped logging books there years ago; Goodreads can never replace the serendipity and conversation-starter capabilities of a physical bookshelf.

DRM and publisher pricing models also often make print more attractive than e. DRM prevents me from sharing a book with a friend or passing it along to a family member when I’m finished with it. Also, the the new agency pricing model means that consumers often only see a small savings between the e price and the print price. In some cases publishers are asking consumers to pay almost the same price for the e edition which clearly has no COGs, comes with plenty of restrictions and offers nothing more than a print-under-glass experience.

In short, most ebooks suffer from a value proposition problem. To address this situation publishers need to rethink their digital value proposition and invest in innovation.

Regarding value prop, publishers need to understand who is buying their content and how it is being used. For example, if the ebook is simply a digital alternative to the print version, offering nothing more than a print-under-glass experience, they might want to consider employing the digital companion model I described last week.

Innovation is where the real future opportunity lies though, and I’d like to illustrate that with a product that seemed to reach the end of its innovative life long ago maps.

Remember when GPS devices became affordable several years back? They brought an end to wrestling with enormous maps that required an origami degree to fold back into their original state. Then smartphones hit the scene and their built-in sensors made dedicated GPS devices obsolete. Google Maps on your phone showed you where you were and gave you turn-by-turn advice on how to reach your destination. It seemed as if there were no more innovation opportunities for maps…and then Waze arrived.

Waze brings the power of community to mapping and navigation. Thanks to Waze I see real-time warnings for debris on the road, stalled vehicles on the shoulder or congestion to avoid. Before I hop on the interstate I make sure Waze is up and running. And because Waze is community-based I try to be a good community member by contributing as much information as I consume.

The next time you think about your digital content strategy, try to avoid looking at everything through the simple, restrictive lens of print-under-glass. If maps can continue to evolve I’m quite certain books will as well.