As of November 2010, ebooks still have a ways to go. According to a Forrester survey, more people used laptops than any other ebook reading device. If laptops and their smaller sibling the netbook are combined, nearly 50% of ebooks were read on a computer rather than a specialized ebook reader. This is not a testament to how great the reading experience is on a laptop, but rather an indication of the hurdles for ebook readers.

Also, in spite of all the hoopla in 2010 about ebook readers, only 7 percent of U.S. online adults currently read e-books. That number will surely grow in the coming year.

More: http://www.wired.com/epicenter/2010/11/and-the-most-popular-way-to-read-an-e-book-is/

Over at idioplatform.com Andrew Davis gives his take on the future of publishing. Snippet:

One of the most significant risks to publishers, much more important than a fall in demand for traditional products, is that their position in the value chain could be removed entirely. [...] To start to provide a route out of confusion, there is a two-step change of focus that must occur. Firstly, publishers must start to consider their business to be community management, not shipping books. Publishers that have built direct relationships with their most active, vociferous, and passionate customers, have an opportunity to maximise lifetime customer value. Secondly, it’s vital to shift the focus from monetising content, to monetising that community. Digital content, in most instances, is trending downwards in price.

The truth is that there will not be as much money in the selling of content as there has been. That’s a result of content ubiquity. The lie is that most publishers have to go bust. There are a myriad of potential revenue streams when communities are the source of monetisation.

Of course tied up in the article is a sales pitch for Idio’s services, but that doesn’t mean the man is without a point.

More: http://idioplatform.com/2010/10/the-future-of-publishing-like-minds/

We’ll see where the publishing world goes in the new year.

I have been meaning to post a link to this article for awhile. Skip Picard, CEO of Ingram Book Company, wrote an optimistic piece about the future of publishing, and books, for The Daily Beast. He makes the worthwhile point that since the high sales of the Kindle and iPad the sales of hardcover books has actually gone up. His view can be summed up as follows:

Finally, Johannes Gutenberg can relax. Long into the future, the printed book will continue to survive because of its portability, durability, and flexibility. Many readers will prefer to read printed books for a variety of reasons that will endure. Though massive print runs will decline, today’s print technology allows a book to be manufactured and delivered within 24 hours of placing an order. I foresee a future when all of the electronic devices will have a button to press when you decide you really want that hardcover or paperback copy mailed to your home. Because no matter how exciting the world of enhanced media books becomes, I suspect there will be some like me who want it both ways. I may love my new iPad, but I still look forward to reading that relic of the past, the good old-fashioned, printed book.

It is nice to find a few sane heads in the publishing world.

Full article: http://www.thedailybeast.com/blogs-and-stories/2010-07-28/the-future-of-books-ceo-ingram-skip-prichard-feels-confident/



I upgraded my computer operating system this week.

On one of my computers I run the Linux distro Ubuntu. I have been using Ubuntu for a number of years, and I have been very happy with it. I would recommend it to anyone who wants to rehabilitate an old computer—for free—to be used as a word-processing, wed-browsing, and e-mail computer. Canonical, the company which releases Ubuntu, supports the operating system with program patches and upgrades. Every version of the operating system is supported for a set number of years—then you must upgrade to a newer version, (still for free) or use your current version unsupported.

When I went to install some patches/upgrades on my programs I saw a new version of the Ubuntu was ready for install. There was a moment of hesitation because I had no complaint over my current version of Ubuntu, and there is a part of me that firmly subscribes to the adage, “If it isn’t broke, don’t fix it.” However, after a moment’s pause I went ahead and clicked the install button. I figured a new version should be at least a small improvement over my current version, and I thought it best to not be left behind in the dust of unsupported software.

The installation went very smoothly. I notice no real difference in the functioning of the new Ubuntu—since I was satisfied with the old, this is a good thing. This sad, there were still a few points that made me less than 100% happy.

In a nutshell, the problem is that the new install was too presumptuous. I was not happy that my Ubuntu theme (visual skin) was changed. At the very least the install should have asked if I wanted to change, or stick with what I had before. I managed to quickly change it (mostly) back to how I had it visually before, but I shouldn’t have needed to do this. Second, my IM client was changed from Pidgin to Empathy. Empathy is supposed to be an integrated client, slimmer than pidgin, and the wave of the future. It does appear to be lighter in memory use than Pidgin, but the program is still rough, and feel like a functional step back from where I was. Worse, I wasn’t even asked if I wanted to do this. It was presumed. Finally, a number of programs were un-installed, and it seems like for no good reason. When the new install began a long list of programs that would be removed was presented to me. I quickly scanned the list and concluded that most of the stuff was just crap that should be removed. But my old IM client? And my FTP program? Shouldn’t you have presumed that I wanted to keep those instead of presuming that something I had installed should be uninstalled? And as a last insult, it appears that Apache is no longer configured, or at least not set to load on start. Which means I must go back and reset that up again.

In short, everything about the new version of Ubuntu appears to work well, but the installation process was far to presumptuous. I am left feeling like some stranger when rummaging through my belongings, and “cleaned up” and threw stuff out without asking me. I can get everything back, and set everything right, but it is annoying that I must do that.

You might call them depressing statistics, but they are facts and worth keeping in mind when you contemplate publication. The short story is this: Less than 2% of published books will be commercially viable. For a full breakdown of the stats: http://jessiemac.com/blog/2010/08/09/i-am-a-writer-should-i-get-a-book-deal-self-publish-or-self-distribute/

The following article takes a broad look at the publishing world today, but what I think is of particular interest is the section on the Kindle. Those not familiar with the ins and outs of publishing world will find the rest of the article worthwhile: http://www.fourhourworkweek.com/blog/2010/08/23/seth-godin-and-print-publishing/

A Wall Street Journal article has a noteworthy little nugget about what ebooks are doing: “Among early adopters, e-books aren’t replacing their old book habits, but adding to them. Amazon, the biggest seller of e-books, says its customers buy 3.3 times as many books after buying a Kindle, a figure that has accelerated in the past year as prices for the device fell.”

With a trend like that, who is going to worry about ebooks? Full article: http://online.wsj.com/article/SB10001424052748703846604575448093175758872.html

The big news rocking the publishing world is that Andrew Wylie is thumbing his nose at the publishing companies.⁽¹⁾ The Wylie Agency (run by Mr. Wylie) signed an exclusive ebook deal with Amazon.com to release to release 20 title on the Kindle, with the possibility of more.

Everyone in the industry–publishers, agents, and even authors–are in a tizzy over this, but publishers especially. The books Wylie Agency chose for this deal where not books never before published. Instead, 1980s and earlier classics where chosen, books still in print in physical form by large publishing houses like Random House. Wylie chose a small selection of popular books from a time when publishing contracts didn’t include a clause dealing with ebook rights and went around the publishing houses to release them as ebooks.

This has lead people to ask, “Why this move?” As the LA Times put it:⁽²⁾

Surely someone at the Wylie Agency has Random Houses’ phone number. If they wanted to cut a deal with Amazon.com — a company Random House has maintained a strong alliance with — certainly the deal could have been negotiated in board rooms and over coffee, or however the big guys of publishing make these things happen.

Instead, we see a late-night announcement, followed by a public statement threatening “appropriate action.” Why take it public? Are we supposed to choose sides? Which one appears to be the winner?

The answer is that this action by Wylie Agency was a shot across the bow. There was plenty of back room negotiations, but that wasn’t working to Wylie’s satisfaction. A Harvard Magazine profile of Wylie prior to the news of this deal with Amazon lays out the situation:⁽³⁾

Wylie’s negotiations with publishers on the book industry’s version of the iPod, e-books, are currently on hold across the board. He’s dissatisfied with the terms publishers have been offering for e-book rights, which were not widely foreseen and are not allocated in most extant book contracts. In fact, Wylie threatens to monetize those unassigned rights by going outside the publishing business entirely: “We will take our 700 clients, see what rights are not allocated to publishers, and establish a company on their behalf to license those e-book rights directly to someone like Google, Amazon.com, or Apple. It would be another business, set up on parallel tracks to the frontlist book business.” Such a heretical strategy would likely meet with stiff resistance from publishing houses, which have invested years, even decades, and millions of dollars in establishing their authors as brand names in the marketplace by printing, promoting, and selling their books.

Unable to bring publishers to terms he wanted, Wylie made good on his threat.

It is fascinating to watch this unfold. Random House’s reaction was swift and stern, as The New York Times reported:⁽⁴⁾

The Wylie Agency’s decision to sell e-books exclusively to Amazon for titles which are subject to active Random House agreements undermines our longstanding commitments to and investments in our authors, and it establishes this agency as our direct competitor,” Stuart Applebaum, a spokesman for Random House, said in a news release on Thursday. “Therefore, regrettably, Random House on a worldwide basis will not be entering into any new English-language business agreements with the Wylie Agency until this situation is resolved.”

Other responses were more muted. John Sargent, the chief executive of Macmillan criticized Mr. Wylie for cutting an exclusive deal with Amazon. Mr. Wylie, however, remains unrepentant. Since news of the deal initial broke, he has gone on to threaten⁽⁵⁾ “a broad expansion of his digital publishing business to include up to 2,000 titles if traditional publishers refuse to improve digital royalties.”

I don’t have a horse in this particular race, but if someone asked me I would advise all parties involved to be very careful. I don’t think publishers have been fair to authors as far as royalty payments for ebooks. And, though I am no legal scholar, I think Wylie was within his legal rights to release ebook titles for books with no contract clause assigning those rights. Whether it was wise for him to spite the publishing houses in this way is a different question entirely.

In any case, I don’t see Mr Wylie as some knight in shining armor for authors. He is simply trying to do the same thing as the publishers–get as much money for himself as possible. Only, in his case this means getting as much money for his authors as well, since he gets a cut of their royalties. While there are authors would appreciate this attempt to gain as much money as possible, it does put me off a bit. I am not of the opinion that getting as much money as possible from other people is in my own best interest, and I frankly find the opinion of monetary conquest expressed by Wiley in his Harvard Magazine profile to be off-putting. It demonstrates a mindset interested in amassing wealth, not being generous, or fair:

If, as he says, he assumes near-ownership of his authors’ personalities, that may help explain the ferocity Wylie brings to his defense of their literary assets, aggressively protecting the intellectual property of agency clients newly vulnerable in an online world. When the W.H. Auden estate signed on, the poet’s entire oeuvre was available free of charge on the Web, in defiance of copyright law; Wylie assigned five people to work round the clock to shut all the sites down. The lapsing of copyright isn’t necessarily an obstacle, either. Wylie is now working with the Royal Shakespeare Company, a team of scholars, Random House, Macmillan, and digital producers to create a First Folio edition of Shakespeare. “If you find a hole like this [there was no First Folio in print in English] in the market and make it your own and protect it with a combination of copyright and the trademark of the Royal Shakespeare Company—a definitive performing troupe—then to all intents and purposes, Shakespeare is who you are,” Wylie explains. “And you get paid 10 percent for every copy sold.

“If Lewis Carroll and his estate had properly protected his rights, then global vacationers would be headed to Wonderland instead of Disney World and they’d have a more meaningful vacation experience, because Lewis Carroll is more interesting than Walt Disney,” he adds. “And if you could capture the value of Shakespeare, monetize and preserve it, then Microsoft and Google would be subsidiaries of the Royal Shakespeare Company. That’s the way I want to organize the world.”

In the end, Mr. Wylie may rue the day he started this ball rolling. It is very true that he doesn’t need the publishing houses to release ebooks. He can do that all by himself. But, so can the authors. So if we are going to question why we need publishers for ebooks, how long is it going to take authors to start questioning why the need agents taking a percentage of their ebook royalty money? At the end of this battle, Mr. Wylie may find himself losing as much as the publishers.

______

(1) NPR story on Wylie Agency ebook deal: http://www.npr.org/templates/story/story.php?storyId=128789516
(2) LA Times blog article on Wylie-Amazon deal: http://latimesblogs.latimes.com/jacketcopy/2010/07/random-house-wylie-amazon-ebooks.html
(3) Harvard Magazine profile of Andrew Wylie: http://harvardmagazine.com/2010/07/fifteen-percent-of-immortality?page=0,1#
(4) NYT article on publishing reaction to Wylie deal: http://www.nytimes.com/2010/07/23/business/media/23author.html
(5) Financial Times article on Wylie threat to expand digital publishing: http://www.ft.com/cms/s/0/6d62b464-9b4f-11df-baaf-00144feab49a.html?referrer_id=yahoofinance&ft_ref=yahoo1&segid=03058

Early in July Salon put up a February Barnes & Noble interview with Clay Shirky. This is a man on whom is heaped the praise, “Shirky has emerged as a luminary of the new digital intelligentsia, a daringly eclectic thinker as comfortable discussing 15th-century publishing technology as he is making political sense of 21st-century social media. I don’t know about all that, but the interview touched on the subject of the Gutenberg revolution, and the present day equivalent, so I read the interview.

The interview was not as focused as I would have liked, or as deeply insightful as Mr. Shirky was billed. That said, he manages to articulate some points well. An example:

So when I say “publishing is the new literacy,” I don’t mean there’s no role for curation, for improving material, for editing material, for fact-checking material. I mean literally, the act of putting something out in public used to be reserved in the same way. You used to have to own a radio tower or television tower or printing press. Now all you have to have is access to an Internet cafe or a public library, and you can put your thoughts out in public.

So what happened to literacy in the 1600s, 1700s and 1800s is that it went from being reserved for a specialist class to being a general feature of the middle class. The same thing is happening to publishing — the ability to put something out in public is becoming more important to society, but the delta between “I can put something out in public” and “I can’t put something out in public” is no longer so great that you can automatically make money simply by having access to the means of publication.

For more: http://www.salon.com/books/feature/2010/07/09/clay_shirky/index.html

A few links to give an un-scientific snapshot of where ebooks currently stand in the book market.

Mashable.com⁽¹⁾ has an article up asking readers which they prefer more, ebooks or physical books. Being a tech leaning website I expected ebooks to score well with all the techno-phile readers. After all, people who avoid computers aren’t even going to participate in the survey, so ebooks have a significant edge. Surprisingly, whatever boost the gadget loving people gave the ebook, it was not enough. As of writing this article the survey stands with 23% saying ebooks are better 42% say physical books are better and 35% say both have their advantages. A survey that was not biased to tech users would have the ebook scoring even lower, so this says something about people’s prejudices, or the real life inferior experience of the ebook.

On that subject, Nielsen Norman Group discovered in a recent usability survey⁽²⁾ that it takes longer to read books on a Kindle 2 and iPad then reading a physical book. Reading speeds declined by 6.2% on iPad and 10.7% on the Kindle 2. This adds up to a significant amount of time when we’re talking about the hours it takes to read a longer book, and is the clearest evidence that the screens on ebooks are still not up to the quality of physical books.

But then, Amazon has recently said that sales of ebooks has outpaced the sales of hardcover books.⁽³⁾ While this says something, I’m not convinced it says as much as Amazon would like people to think. (It was clearly released as a PR gambit against the iPad.) Hardcover books hold a smaller portion of the publishing market than paperbacks, but I haven’t been able to get a clear figure on exactly what percentage of the market is hardcover. Also, it isn’t clear how much of Amazon’s sales were in hardcover before, compared to the rest of the book selling market. So, while yes, ebooks are selling more, Amazon’s information is very short on facts.

But, interestingly enough, the sales of physical books are doing well too. In the middle of June the Association of American Publishers released sales figures for books⁽⁴⁾ in April. Hardcover sales increased 49.2% from the previous year softcover increased 19.4% from the previous year, and ebook sales increased 217.3% from the previous year. While ebook sales are clearly experiencing explosive growth, it does not appear to be killing off either hardcover or softcover books.

______

(1) http://mashable.com/2010/07/19/reading-faceoff-e-books-vs-print-books
(2) http://mashable.com/2010/07/02/ipad-kindle-reading-study/
(3) http://mashable.com/2010/07/19/amazon-kindle-sales/
(4) http://www.publishers.org/main/PressCenter/Archicves/aprilstats.htm

It can be interesting to read through articles in the publishing industry and see how different people, and companies, are reacting to the changes in the publishing world.

An example of a more embracing attitude would be David “Skip” Prichard the c.e.o of Ingram Content Group. Prichard’s attitude is that, “New players don’t know what the rules are, they simply do things as efficiently as they can to reach the most people. They will change the model repeatedly. History is an asset but also a challenge, because we need to adapt so quickly.” ⁽¹⁾

Another differentiator between those who fear the future of publishing and those who embrace it is their view on DRM (Digital Rights Management) technology. Those who truly understand and embrace the publishing future are looking beyond DRM. Those who are terrified of the future are scrambling to figure out what DRM they can use to lock down the world. TheBookSeller.com⁽²⁾ has a good article summing up some ideas presented at this years Tools of Change conference. It is a short article, but makes a brief summary on why DRM is not the way of the future. One quick quote: “You create piracy by the failure to release digital content. Don’t try to solve piracy: think about managing it.”

And then there are those who, by the very way they speak, demonstrate the depth of their failure to understand (or be willing to embrace) the future of publishing. At the BEA (Book Expo America) a bunch of prominent people in the publishing industry got together to talk about the future of publishing, and most of it was fretting, with comments like “Something’s radically wrong about the way the market has determined the value of the book.“⁽³⁾ (Ie, things are too cheap.) The article is a fascinating look into the bunker mentally of fear and fighting the future.

For more reading, check out my own, “The Future of Publishing Series.”
______

(1) http://www.thebookseller.com/in-depth/trade-profiles/122935-looking-beyond-print.html
(2) www.thebookseller.com/news/113616-copyright-piracy-and-anti-drm-dominate-tools-of-change.html
(3) www.thebookseller.com/news/119510-publishers-express-fears-over-price-paperbacks-and-fragmentation-at-bea.html

I recently came across an article that gives a peak at the underside of the ebook publishing world. This falls under the category of “See How Much We Were Ripping You Off”:

SEATTLE — Amazon.com Inc. said Wednesday it is now offering do-it-yourself authors and publishers royalties of about 70 percent on their e-books.

The online retailer in January had announced plans to offer users of its e-book self-publishing program, the Kindle Digital Text Platform, book sale royalties of 70 percent after delivery costs. Those costs generally amount to less than 6 cents per book, meaning authors will be able to earn $6.25 per copy on a book that sells for $8.99, nearly double the old rate of $3.15.

(Full article: http://www.huffingtonpost.com/2010/06/30/amazon-increases-author-r_n_630646.html

So now we have the figures in black and white. The cost of distributing an ebook on a 3G network is 6 cents, and Amazon has graciously decided to stop holding authors over the barrel…quite as much. In reality, the author should be getting 90 or 95% of the profits. Why? Because the risk to Amazon in carrying an ebook is non-existent. There is no risk to Amazon. However, an author takes considerable risk devoting time to writing the ebook that is sold, and so deserves the majority of the profits. In the old publishing world of big book print runs, a publisher took considerable risk in publishing a book, and so got a larger portion of the profits–but that doesn’t apply to Amazon and ebooks.

I think you will see the author share of profits rising higher than this 70% because the different distributors are going to race to offer the most attractive deal, and as I’ve said it is a risk-free deal for them. It may never reach 95% of profits for the author, but I will be interested to see how close it will come.

Another thing that article demonstrates is the pressure for ebook prices to come down. The article mentions that, “Some major book publishers have demanded that Amazon allow them to raise prices on e-editions to as much as $14.99” which is completely appalling. That kind of pricing structure is clearly invented by someone rabid with fear that the old publishing model will disappear. In contrast to that, Amazon offers authors this higher profit margin if authors will keep there ebooks priced between $2.99 and $9.99.

The war is on, but I don’t think even Amazon’s price bracket is right. I think ebook pricing should be $2.99 and lower.

The one thing clear from the article is that neither Amazon nor the traditional publishing houses really have the author’s interests foremost in their plans. It is all about domination in the book world, and authors are but pawns in the war. So long as the contestants are fairly evenly matched, the battle will, in general, be good for consumers and authors. A monopoly win by anyone will be bad for the business.

For more reading, check out my own, “The Future of Publishing Series.”

Mike Shatzkin over at the Idea Logical Blog (http://www.idealog.com/blog) has his own opinion about the future of ebooks. In his view, he sees a more aggressive adoption of ebook readers. He sees an estimate of 50% of book sales being ebooks in 5 years as low. My current views are more conservative.

I do agree with his complaint about DRM technology, and his opinion that ebooks are a good thing. His piece is worth reading to get a different opinion.

One thing I think in particular which is worth noting is how quickly the price of ebook readers is coming down competition is a good thing. I’m not surprised that the prices are coming down. If you’d asked me earlier I would have told you that ebook reader prices would eventually come down to $100. If the prices drops that are currently happening continue, we could see ebook readers for less than $100.

But there is one fly in the ointment: I suspect that currently ebook reader devices are being subsidized by the high price of ebooks. If the price of ebooks go down, the price of the readers may need to go up. (And some device manufacturers will likely go out of business.)

There will be much change in this market.

Link: http://www.idealog.com/blog/big-publishers-have-reason-to-be-happy-about-how-the-book-market-is-evolving