Old readers discussing new books

Mike Shatzkin describes the results of a question he asked the audience at NYU yesterday:

So, with time running out, I got the indulgence of the organizers to ask the crowd a couple of questions. The first one was: “how many of you read ebooks.”

Two hands went up. Two.

The next question was not worth asking. But I sure got a dose of new information to ponder.

There is a saying about eating your own dog food. Everyone talking about e-books needs to be reading them or admitting that many of them are unreadable. Books went through an evolutionary period when many poor copies of a title obscured the value of well-made and edited titles. With e-books, the formats are awkward to begin with, and the poverty of the technology is amplified by the badly converted texts, not to mention a lot of bad texts.

Readers will lead this change. That is doubly true of publishers who wish to lead a change toward digital texts, they need to read first and ask more of their titles before trying to sell them.

Over at Tools of Change: Scrib’d winning at feedback

Andrew Savikas of O’Reilly’s Tools of Change for Publishing has a very interesting post about the feedback he’s getting from Scribd.com, including email every time a copy of one of his books is sold. This kind of give-and-take allows a very high degree of engagement by the publisher or self-publisher with their audience, something that most booksellers do not think of, let alone build into their sites.

To some degree, bookseller sites need to approach the level of interaction between publishers and bookbuyers that people are increasingly used to in sites like Facebook or Twitter. Reading, however, is deeply associated with privacy, for psychological and political reasons. Auto-subscribing a customer to an author may be too presumptuous but it may be perfectly acceptable for an author or publisher to be auto-subscribed to a reader’s feed, if the reader chooses to disclose it. Then, of course, the challenge is how to use all that information and connectivity to do something meaningful.

Savikas mentions the Digital Sales Report Format, an XML standard for delivering book sales information and David Marlin of MetaComet, who contributed to the standard chimes in to say that it will be the focus on more adoption in coming years. It’s a solid foundation for transparency in bookkeeping, though not a social engagement platform in any sense.

Ultimately, that engagement will take place through the book. It requires more than shared annotations, since some notes and reading need to be kept to the reader, but still be shareable in appropriate situations. Privacy, not total transparency, contributes to thoughtful reading.

AT&T’s designs on wireless devices: Wrong avenue for e-books

A couple years ago, Ed Whitacre, then the CEO of AT&T, told an audience that he resented Web companies’ use of “his pipes” for “free,” ignoring completely the fact that every company connected to the Web is paying for the privilege. He simply wanted a larger cut, a piece of every transaction flowing over “his pipes.” Now, his successor at AT&T is taking a shot at e-book reader development, according to BusinessWeek.

Let me preface the following by reiterating my long involvement in telecommunications and with AT&T. I have spoken at AT&T Bell Labs and appeared in a “vision video” about the AT&T service that was designed the support the General Magic device. I’ve seen AT&T go through three cycles of decline and recovery, interviewing a series of its CEOs along the way. We are now at the tail end of its latest recovery, though the company has yet to earn a market cap approaching the amount of money—more than $200 billion—Whitacre spent to cobble together many of the former Babies Bell into the “New AT&T.” The company has also consistently underperformed compared to its industry and the wider market since Whitacre’s tenure began.

AT&T should stay out of the e-book reader business.

AT&T was a consumer hardware company in the early 20th Century*. For the most part, however, it has only succeeded in delivering enterprise technology and services or creating technologies which it failed to commercialize as effectively as upstart competitors (like the transistor and the fundamental elements of the hard drive). But hundreds of thousands of smart people have worked there over the years, and it has done some things very well at certain times. I thought, for example, that it’s support of General Magic’s Telescript agent-based application technology was potentially visionary. Instead of adapting Telescript to the emerging public Internet and its standards, which would have trumped Continue reading

The app-ification of publishing

Publishers Weekly‘s Craig Morgan Teicher has a long feature, “The App Boom Hits Publishing,” which reads like an article from Digital Media, my old newsletter, in the early 1990s. There’s a kind of Lotus Eaters quality to it, as it requires you believe application-based e-books solve the e-publishing problem.

The article revolves around repurposing existing content, such as crosswords and foreign language phrase books, by making them interactive, which is an excellent and relatively simple strategy if you have the right kind of titles on the shelf. It goes so far as to conflate that kind of title with any title that might be digitized.

The article makes the case that any book can be turned into an application and associates the ePub format, an e-book format designed to provide open cross-platform readability, with applications that are proprietary and closed. It’s a mistake to think that applications, which rely on functional code to enclose a text, are open or that they will survive the relatively brief period of time when e-books have not been published in a standardized format that can be read in a variety of applications. It’s a bandage on a heavy wound, one that, if future e-book readers cannot access the books people buy today, will alienate readers from e-books because they will seem increasingly unreliable.

Yes, Apple’s App Store is a big deal and a lot of applications, including e-books, are selling there. But the model isn’t predicated on the application, rather it is thriving on the fact that all iPhone apps run on all iPhones. Portability from one phone to the next, so that buyers don’t find they cannot access their data after upgrading their iPhone, is the key to the app model’s success.

Texts wrapped in code become incompatible with all but the operating system and hardware that it was written to run on. Texts need to be portable, so that books remain useful. Amazon’s willingness to deliver a Kindle book over and over to new reader devices is the right way to assure readers they will be able to access a proprietary format, but it is also the cost of that proprietary format for the distributor.

If a publisher is going to publish “in an app” today and abandon the reader and customer support when they move on to the next application platform, they are risking losing each customer they are spending to win today.

Re-purposing is a stop-gap strategy.

Adding value means more than digitizing a book.

Putting your book into a proprietary format dilutes the value of the book to the reader, because it diminishes the utility of the text over the long term.

Enough said.

Soon, Amazon, Apple and Google will not be e-book competitors

Observing a market in development, such as the e-book business today, teaches the thoughtful analyst one thing above all else: No company is making investments that lead to failure. They only fail by mistake, by placing too large a bet on one direction the market might take. Amazon is no more at war with Google than it is with Apple. Yes, they are competing for dominance. But neither company would kill itself over this one vertical within either of their much broader businesses.

Amazon can drop the Kindle hardware to sell more books on an Apple device or through Google Books. Google could embrace the Kindle format, as well as the Mobipocket format that Amazon owns. Apple could provide hardware to serve up both Amazon and Kindle books. Microsoft, as the odd-man out and dominant operating system player is least like to control the high ground in any of these markets, because it holds the largest share of revenue generated by consumers today.

None of them will destroy the rest of their business to control the book publishing market, which is worth only $46 billion annually according to the most optimistic estimates. Mobile phone hardware, search engine marketing and advertising and PC operating systems are all larger markets than books, though one could argue that publishing has the greatest potential to drive revenue if managed perfectly. It is easier for any of these companies, however, to sell hardware, advertising and operating systems and development tools than to undertake the challenges of publishing.

Instead, these companies are jockeying for leadership, which will allow them to dictate their share of the resulting market for e-books, e-magazines and e-anything that generates revenue. Eventually, and I believe it will not be long, Amazon will yield to Google, making its book available on Kindle, or by licensing its formats to Google to sell independently of Amazon (but sharing revenue when the Google-scanned books are sold in Amazon’s Kindle Store). Apple will sell hardware, driving sales of e-books through any channel that provides books that run on its hardware. Likewise, Microsoft, which know it has lost the high ground in electronic publishing, will cede publishing revenues in exchange for support of its OS by the widest range of e-readers.

Only Google and Amazon are so decidedly at odds that they cannot work together. One of Microsoft’s most profitable divisions has long been and remain its Mac software unit. Everyone else in the e-books market has only their long-term survival at the center of their calculations, and none of them depend on dominating publishing.

Hachette’s got no problem with Text-To-Speech in Kindle, except….

The Hachette Book Group, parent of Little, Brown  and Co., Grand Central Publishing and other imprints, has embraced Amazon’s Text-To-Speech technology, introduced in the Kindle 2, which lets the device “read” the book aloud in a synthesized voice, according to Publishers Weekly. The publisher said in a statement that it will allow any book to be read, unless the author asks them to disable the Text-To-Speech feature (PW backgrounder here) or “books that fall within our audio publishing program or specialized circumstances like memoirs, where the author or character’s voice is an artistic element of the work. Under such circumstances HBG reserves the right to request that the functionality be disabled.”

That suggests that books available in audio format from Hachette imprints will not include Text-To-Speech capabilities on the Kindle. While it is good that Hachette is open to buyers using Text-To-Speech, this qualified position about when it is comfortable allowing it makes this a statement of a non-position. Books with Text-To-Speech disabled need to be labeled. It would be better, I believe, to offer an audio version of a book read by a narrator or the author when turning on the Text-To-Speech version. Publishers should go so far as to offer the first chapter in spoken word format for free, then, if the buyer wants to hear the book in a synthesized voice, let them.

Rather than raising barriers to use of a text by customers, turn the Text-To-Speech option into a selling opportunity that will be perceived as greater service by readers.

Gladwell, Anderson and Godin: All wrong for the typical writer

Chris Anderson, editor of Wired, has a new book, “Free,” coming out in July. It’s not free, it costs money. Malcolm Gladwell, who has written many books that have contributed to one-word business-speak, wrote a review of Anderson’s book in the latest issue of The New Yorker. He didn’t like it. Now, Seth Godin, another author of many books, says Malcolm’s wrong.

It’s a guru slap-down!

With all due respect, they are all wrong to one degree or another. Each also is partially correct. Casting this discussion as an either/or is misleading, the trivialization of the real issue by people who no longer have to worry about making the first step into publishing. For a writer, though, giving away books is not the solution to jump-starting a career as a published author (there is a big difference between being a writer, which anyone can do, and being an author, which anyone can also do), it’s the beginning of building a living, a small business that, in all likelihood, will never be a big business.

The future of business will not be built on a price point, but the value delivered and the cost of delivering it. This isn’t a binary challenge that will be answered by giving away news and entertainment. Gladwell accurately deflates Anderson’s sweeping statements, which were laid out in a Wired feature last year, “Free! Why $0.00 Is the Future of Business.” In his review of the upcoming book from Anderson, Gladwell writes:

His advice is pithy, his tone uncompromising, and his subject matter perfectly timed for a moment when old-line content providers are desperate for answers. That said, it is not entirely clear what distinction is being marked between “paying people to get otherpeople to write” and paying people to write.

The first sentence is clever and could equally be applied to Gladwell’s definitive answers to questions about decision-making in “Blink” and “The Tipping Point.” A simple statement, such as this from Anderson’s Wired article can be very attractive to desperate publishing executives seeking to compete with the rapidly declining cost of publishing, which kicks aside barriers to competition from virtually anyone on the planet:

The new model is based not on cross-subsidies — the shifting of costs from one product to another — but on the fact that the cost of products themselves is falling fast. It’s as if the price of steel had dropped so close to zero that King Gillette could give away both razor and blade, and make his money on something else entirely.

Gillette adds blades to its cheap razor refills to justify high prices, not because it is cheaper to add blades to the Mach III. Low costs are exploited to raise perceived value (now, with 50 blades!) and profit margins. It would be nice to think industry works solely in response to economic formulae out of the goodness of executives’ hearts, but life doesn’t work that way, even when everyone is “pursuing their passion.”

Gladwell’s last sentence, which is in bold above, cuts to the explicit assumption in Anderson’s article, that the cost of products is falling so fast that prices become irrelevant. This is true for media markets only if you believe that people will no longer earn a living from their work, which they apparently will have to give away to get attention. Gladwell is correct that at some point, people need to get paid to produce work on a consistent basis. Doing journalism, for example, is expensive. The people doing it for free will eventually realize the value of their contribution and ask for compensation or simply quit and go back to the work that makes them a living (they may, of course, continue if the effort yields political or social prominence, but they will never trade a living for influence with no path to a good living, and we get crooked press and politicians out of that market configuration).

Yes, as Seth Godin argues, “In a world of free, everyone can play.” We can all play writer, but when does becoming a writer actually become a living? If we’re going to assume that all writing will be made and delivered at no cost to the reader, how will the writers put a roof over their heads, food on the tables and kids through college? Writing has never been a great living, but it was a living if one worked hard at it. “Free” only Continue reading

Reviews are still king

As long as you don’t handle negative reviews the way Alice Hoffman did, they remain the most effective way to reach and engage potential buyers, eclipsing Twitter and Facebook, according to Ad Age‘s Abbey Klaasen. Reviews offer fully explained reactions to products purchased by real customers in contast to the fragmentary telegraphic conclusions posted to Twitter and other social messaging sites.

The challenge for companies is finding a way to listen effectively to buyers when they write reviews on blogs and at commerce sites. Here are the four “right ways to user reviews,” from the article:

  • Embrace the feedback — find a way to actually listen and digest the customer’s ideas inside your company.
  • Tout your customers’ favorites — they can tell other customers better than you can.
  • Incorporate customer service (yes, use reviews to identify problems and solve them for customers).
  • Don’t stop there — let reviews grow into communities.

All of these ideas are critical to publishing success, as well.

Talenthouse: Collaboration and exhibition venue

TalenthouseA new creative community, Talenthouse.com, launched this morning with video and images from hundreds of recognizable artists, says it will “eliminate the age-old artistic struggle for recognition and instead focus on creative excellence,” according to founder and CEO Roman Scharf, who also founded JAJAH, a voice over IP developer.

The Mountain View, Calif.-company offers an elegant alternative to MySpace and suggests it will help artists collaborate. Artists can join and propose collaborations through the site. The main functionality, however, is the ability to upload and display works. It is primarily a platform for being seen and finding fans.

Talenthouse pledges to foster “seasoned and up-and-coming talent and proactively facilitating interaction between them and established icons and industry players.” The language takes art and places it squarely in the marketing speak of corporate development. I am not sure this is the correct way to put it in order to win artists to the site. Yet, sites of this kind are going to be notable hubs of activity in the careers of working artists and performers.

Supporters of artists are encouraged to share their fandom with automated tools for posting to Facebook, MySpace, Twitter and other social networks. It looks like a viable marketing platform, but I find its statement that it is the “only purpose-built online platform for all artists and creatives” over-reaching, as there are many such services vying to support and, in return, gain the support of artists. The site has 25,000 members after its alpha testing phase and aims for a million within a year.

Talenthouse is currently aimed at visual and performing artists as well as fashion entrepreneurs.

Agents, advances and the “long tail” going negative

Mike Shatzkin has an excellent piece today on the evolving role of agents in publishing. His notion of the writer and agent as business partners is important to keep in mind as authors seek the help of an agent. Business tends to be focused on the short term, quarterly results; in publishing, the advance has been the focus on the agent’s efforts, since most books never earn back that advance and it represents the only opportunity for the agent to share in revenue. That needs to change in the midst of a radical realignment of the industry. Long-term partnerships with adequate rewards for everyone involved will have the time and energy needed to solve new publishing challenges.

I’ve never used an agent and am fairly satisfied with the result, because I have not seen much creativity in deal structure in comparison to the agreements I’ve made with publishers. As long as an author is willing to pay attention to the details of a contract, up to date on the current standard for a deal in the market, and uses a lawyer to review the contract, I think the agent can be a wasted expense. However, if an agent can find creative ways to multiply revenue streams and increase the author’s share, they can be invaluable.

The alternative, of course, is to self-publish, about which Shatzkin makes an interesting observation:

But in addition to shrinking, publishing advances are taking on much more of a power law configuration, with concentration at the top and a long tail of books getting less and less (and extended by mushrooming self-publishing where the “advance” is actually negative; it’s a cost!)

The “long tail” of book publishing used to end closer to the base of the X axis of a graph and north of the $0 line (fewer authors made a minimum of positive revenue). Now, it goes on twice as far and dips well below positive revenue, with authors spending their own money to start sales of their books. Too often, when authors follow Chris Anderson’s “long tail” thinking, they envision a positive contribution to their bank accounts no matter where they fall on the power curve. The reality is that nothing is free, as Malcolm Gladwell explains in a devastating critique of Anderson’s new book, “Free,” in the latest issue of The New Yorker. How to exploit “free” transactions to drive real revenue is the problem Anderson misses and Gladwell dismisses.

For many authors today, the “advance” is their investment in the book. If they fail to embrace that investment with the support of marketing and sales efforts it deserves, they are simply throwing their money away.