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"Brave New World 2"
Delivered to National Association of College Stores,
'Innovate 2008' conference, Minneapolis, July 2008
Digitization is a complex publishing issue and is not unlike
climate change in that we all know that it’s happening and we
all know the impact is going to be significant, however, no one
knows when, by how much and what the result will be. Like
climate change it also has its dome mongers, prophets and
analysts and wild predictions.
So will the book die? No, unlike music it is already the
content, the format and a reader. It will be the major format
for many years and represent the major sales revenue for all.
However there are two issues.
Firstly, the book has joined together a number of different
sectors into one. As we digitize then these differences will
become more distinct and the various sectors will diverge often
in different directions and at different speeds.
Secondly, we all love and are comfortable with books. Authors
love to write them, editors love to edit them and readers love
to read them. We have been educated with them and have grown up
with them.
However, digitization now creates the opportunity to explode
the spine of what we have known for the last few centuries and
present content differently. Will it replace the book? No. Will
it help redefine it and how we develop and sell it – most
definitely? Will the digital book be the same as the physical
one? I hope not otherwise we will have fallen into the same trap
as we did between the hardback and the paperback.
Some two years ago I was part of a working group under the UK
Booksellers Association. The task was to establish the digital
opportunities for retailers Many believed there were little
opportunities and that it was a publisher centric world with
publishers increasingly bypassing the retailer and existing
channel? Some believed it was to be a world dominated by new
entrants from outside the industry? Many feared for the future
role for the retailers.
Many questions were being asked and there was much
doomongering.
I wrote the report BA’s Brave New World report which was the
first to focus on the opportunities for retailers. It clearly
looked at the glass as half full not half empty. It reviewed:
Publisher strategies, issues and directives
Consumer trends and drivers
The existing players and the digital market
The publishing value chain and what changes were likely to
happen with respect to roles and relationships
The music marketplace and the impact that digitalisation had had
on the sector
The retail opportunities.
It acceptance by all was a watershed, a turning point for
retailers and an acceptance that retailers had a vital role to
play in the digital environment. It was taken up by many bodies
around the world including the ABA who established its own task
force.
I moved on at that stage and agreed to update events and
trends via a blog sponsored by the BA aptly titled Brave New
World. The blog now has close to 500 articles, is widely read
and referred to within the industry.
When I wrote the Brave New World report there were many
changes that we recognized impacted the digital environment.
Time doesn’t permit me to go through them all, but here are
three which I would like to share with you today.
First - When we read we all read differently according to the
role we play the relevance and the urgency we apply to the
content and what we want from it.
If you were to place an academic book in front of a student,
a researcher, a lecturer, a librarian they would probably use
and digest the content differently. This doesn’t matter when
they are all reading the same physical book but when the content
is digital these differences can become marked. Therefore when
content is presented digitally we all now need to understand the
demands of the audience reading it. Publishers need to respect
that the audience may have different demands and may not all
wish to digest the same way. In developing the content
Publishers now have to consider the audience.
Secondly the world is now consumer centric.
Digitization has broken down the communication barriers that
once existed in the old world and has created ‘My World’ and
social networking. This has even extended to consumers
contributing to as well as commenting on content. The reader now
can communicate effectively with the creator and the creators
communicate directly with their audience. They no longer need an
intermediary or interpreter. So do publishers provide the total
platform and experience or merely the content and leave others
and retailers such as yourselves to build the relationships?
Thirdly, the value chain between the creator and the reader
changes when the transaction and communication go online.
In the pure physical world readers value the selection of the
bookseller, the quality of the content provided by the publisher
and access to what they need in the bookstore. In the digital
online world irrespective of whether the readers want a physical
or digital rendition, the value flips. They now seek
aggregation, search and discovery, authentication and relevance,
and trusted and reliable management and fulfillment. This change
is both significant and can influence the channel to market. It
is not just a case of putting your inventory and offer online,
you have to offer value.
We have ebooks, audio downloads, kiosks, online, social
sites, print on demand and what appears to be a new digital
device every 6 months. The Sony reader is less than eighteen
months old and is about to launch its third version. When I was
with Sony recently they rumoured that version 4 could soon be on
its way.
But this is where we have to understand that digitisation is
not about ebooks, audio downloads, online, podcasts, blogs,
widgets etc. these are merely the delivery and marketing
formats. It is about the creation, development and distribution
of content, the development and distribution of the contextual
information that supports and helps qualify content and rights
that are acquired, developed, produced, marketed, sold and read.
It is also about the changing roles and relationships right
across the life cycle from Author to Reader.
It is about Publishing and digital publishing being
publishing.
When you look at the current roles within the publishing life
cycle. We see the Author as the content creator, the publisher
as the content Manger, the retailers and libraries as the
content portals and the readers as the content consumers.
When we look at it this we have to ask what it means to
manage content and is it different from managing books. What
does it means to be a portal and is that different from a
bookstore or library. What is the relationship between the
bookstore and the library? Who is your customer if you are a
content portal?
There was one piece of innovation within the Brave New World
report on page 57 which was missed by almost all. The section
covered the value chain and identified how the retailers could
participate fully in the digital sales through what I now refer
to as Digital Drop Ship.
Let’s look at the challenge.
How do Publishers:
Keep control of their digital content and avoid merely
handing over to hundreds of digital files to 3rd parties whilst
maximising the opportunities to sell?
Quickly respond to new entrants, new requirements?
Reduce their risk of digital piracy?
Ensure that all manifestations of all title are visible and
available to all channels?
Sell digital content to everyone?
Control digital content in a global market?
Respond to both digital rental and purchase demands through a
consistent approach?
Quickly accommodate online content subscription demands?
Satisfy the trade and library channels through a consistent
approach?
How do retailers:
Sell digital downloads, online subscriptions alongside their
existing physical offer?
How do they retain the consumer interface and relationship?
How do they retain the transaction and pricing?
How do they sell everything digital without huge technology
investment?
How do they manage technical and after sales support?
How they retain and grow footfall within the store?
How do they do all this and continue to do business as usual?
The answer follows the same model that has been so successful in
the physical world – that of customer fulfilment or drop ship.
In this case there are four basic steps
1. Customer searches, discovers and selects a title and
places an order at a website. This should an integrated basket
and single transaction capable of handling both physical and
digital content sales. They pay once and buy what they want.
2. Digital Order is forwarded from the website to Digital
Drop Ship Clearing House which automatically identifies the
appropriate repository and sends a request for a digital token
which is sent back to the Drop Ship Service.
3. The Drop Ship Service then forward the unique digital
token to the user via email (this should be via the retailer or
seller but may be direct if required)
4. The customer, on receipt of the token, activates it and
the download. The file is downloaded from whichever repository
it is stored with the appropriate DRM. All parties are then
notified of the successful completion of the transaction. If
part of a mixed drop ship the physical and digital transactions
are consolidated for the retailer.
The customer relationship is with the retailer, their
transaction is with the retailer and the pick, pack and dispatch
is performed by the third party totally transparent to the
customer.
What are the benefits of Digital Drop Ship:
Publisher can retain digital content and control of their
files reducing the risk of theft and piracy
Easily to implement simple interfaces can be provided to
integrate the e-book ordering/fulfilment option to retail
platforms
e-books can be sold alongside the physical books on the current
eCommerce platform
e-books can be sold by multiple retail platforms with the
content residing once in a central or distributed repositories
Time to market – Everyone can be up and running in days and
weeks not months and years
Digital Drop Ship can accommodate downloadable and / or online
content
Digital Drop Ship Can accommodate full purchase or time based
rental models on full content or part works
Total transparency on all commercial sales and mirrors the
physical world
Retailers can participate and continue to add value
Everyone can reconcile transactions in real time online no more
waiting for reports from often disparate services.
Four examples of Digital Drop Ship: An English education
publisher, is taking orders over the phone on their customer
service desk, and via a Digital Drop Ship web service servicing
these to students as downloadable ebooks. They have not needed
to touch any systems to participate. Within one month, hardly
any marketing, some obvious teething issues and on only 7 titles
they had sold over 150 downloads. Having proved concept, they
are now stepping up the programme and plan to fully integrate it
within their websites.
A Textbook retailer/social network site who today sells used
text books is now going to not just sell drop ship downloads of
some 20,000 titles. They will also sell online drop ship
subscriptions, on time based rental. It is not just about
selling downloads it can be about selling subscription to online
databases and subscriptions to downloads too. This means
retailers can sell subscriptions to online content and in doing
so retain their relationships with their customers.
The leading Danish digital aggregator and library supplier
who is already servicing the Danish market has signed up a
number of major global academic publishers to sell digital drop
ships of tens of thousands of academic titles. They have just
gone live with 18,000 titles and are loading up 250,000 chapters
for sale and rent. A further 6 major academic publishers are in
contractual negotiations to follow.
The largest UK trade wholesaler is rolling out a digital drop
ship service which mirrors their physical service enabling
literally thousands of publishers to sell digital content
through 1,500 Internet retailers. They will also be using the
same Digital Drop Ship service to sell audiobook downloads and
to distribute digital marketing materials.
Retailers who would be unable to participate in the digital
world, now can fully participate and do not need to tie
themselves to an exclusive aggregator.
Which leads nicely to the issue of Digital Marketing
Material.
Widgets
Many of you will have seen a book widget. Search Inside,
Browse Inside, View Inside even Hear Inside. It’s all about
providing a look inside the book, to see the table of content
and sample pages and enabling better qualification. They enable
the consumer to see what they a buying before they buy it. They
can search the table of contents, look at the index and view
whatever the publisher has permitted. They can’t copy it, or
print it, but its certainly the closest to having the book in
the hand. Many even provide full text search across the total
book.
People once said that you had to pick it up, smell it and
feel it to be able to buy it but widgets are changing that. Even
children’s books and heavily illustrated books can be presented
through widgets. Importantly widgets can help sell physical as
well as digital formats, even of the same book.
Remember when we first saw the emergence of the first jacket
images on the web in the mid 90’s. It took time but you would be
hard pressed to find a web site today that doesn’t have a jacket
image for every title. Widgets will be the same in the future.
One of our academic clients will have some 20,000 widgets in the
market by September with all new titles automatically generated
and distributed to major partners. Another is generating them
automatically for its new 1,500 titles and selected back list.
But wigets are not just about look inside a single title. We
see the development of a ‘super widget’. Where the widget just
becomes a container that can hold many things such as;
associated titles and links, rights information, structured
metadata, author videos or podcasts. What I call a real Trojan
Horse.
Inspection Copies
I couldn’t speak to a group of campus booksellers without
speaking about inspection copies. It is estimated that between 6
and 15% of all academic print runs are given away as inspection
copies. Although it doesn’t cost a lot to run on production and
produce extra copies, if you add in the post and administration
and you don’t have to be clever to do the maths. Some are
replacing the physical copy with the digital one. There are
initiatives such as Coursesmart that aim solve the problem.
However the major publishers behind it may be the volume and
where the value is, but the opportunity is about fixing the
others and making it simple and efficient for all. Also the key
is not the content but the reviewer. Someone said to me recently
that dealing with these people was ‘like herding cats’. Well
hello - herding cats may be is what it is about. If every
publisher did it differently why would lecturers and reviewers
accept it? After all it is they are key to the process and they
will want to see value and benefit and not learn many ways to do
the same thing.
We are working with a number of publishers to develop an
online inspection copy service that not only will reduce the
cost of inventory and postage but also enable publishers to see
who actually reads what, potentially capture and share
annotations, bookmarks and recommendations and even help create
ecompile customised works made up of chunks that can be used by
the reviewer or sold to others.
However the real trick is to go that extra mile and build a
community where the reviewers can share their thoughts and gain
value. It would be also logical to include the campus stores to
automatically alert them to adoptions and enable them to
feedback sales into the loop.
Many are looking at the same issues but merely replacing the
physical with digital copy. They miss the prize of developing
closure relationships, understanding their clients and closing
the marketing loop. If we save only 50% of today’s waste it will
be good but if we increase sales and adoptions as well then it
is not an opportunity to be missed.
eInspection Copies close the full marketing circle, 360% and
make more sense than just replacing the physical book.
508 Compliance
How many here today are thinking about 508 compliance?
Disability is painful enough but being able to provide a
solution doesn’t have to be. The capability to do it is here
today and why shouldn’t campus stores help provide it?
Finally Print on demand.
I hope that you have seen that Blackwell retail in the UK is
to start to trail the Espresso Print on demand machines in store
next month with view to a full roll out to all its stores. The
inventory they will be linking to includes Ingram’s Lightening
Source so will be extensive. Will it work – I think so. Will it
be profitable – I hope so.
Whatever, it moves the model from the old print and
distribute to distribute and print. This changes the inventory,
the economics of distribution and offers an interesting consumer
offer. If successful it places them strategically as potentially
the service provider in all the major academic locations. This
is not just about campus sales as these locations also support
the heaviest book readers. It is a very smart and brave move.
As a result, I would expect the unit costs of POD equipment
to fall and the model become attractive to many others. At a
time of soaring fuel costs, high cost logistics and
environmental awareness. It is a very brave and smart move.
I hope I have conveyed the significant opportunities that I
believe are open to you all. The campus store is not dead it is
merely changing and adapting to new opportunities. Will it
survive – I believe so but it will be different and will be
built on its existing relationships with its community and its
publishers.
Many people offer vision but no road map and it would be
wrong of me to stand here and lecture you on what you should and
should not consider without making some recommendations for you
to consider. After all you will all walk away from today, look
at your notes and no doubt ask yourselves, ‘but what should I
do?’
I am an outsider but that doesn’t stop me from offering five
opportunities which I believe as a collective under NACSCORP
will move you significantly forward and position you to respond
quickly and positively to what is clearly an uncertain,
challenging and dynamic future.
1. Adopt Digital Drop Ship as the model to engage all
bookstore into an effective channel for all publishers. Some
would argue that the aggregators do this today but look at the
exclusive models and demand more. You need an inclusive,
integrated and independent model that is inclusive not exclusive
and builds on the relationships you have today not one that
merely put someone else between you and your supply.
2. Widgets. Ask yourself how you can maximise this
within your environment to sell more books. You could even use
them instore to qualify stock you don’t carry. If I am right and
they become ubiquitous how are you going to manage them. I
believe the association has a clear role to play to make sure
the right widgets are create and distributed to its members in a
way that they can be fully exploited and increase revenues
today. Don’t wait for someone to sell you the package do it
yourselves. Solutions here need to offer development and be
built to be ‘out of the box’
3. Einspection copies. I believe you are integral to
the process today and going forward. If you aren’t plugged into
the process where will the sales go. Only by working
collectively and with others will the real benefits on offer
here be realised. After all the reviewers are your customers,
the students are your customers and the books are what you
should be selling why wouldn’t you work with others to secure
it?
4. Print on demand offers much but is a significant
change. It may work in one store but not in another today.
However if you became the first movers and viewed it as a local
resource could it secure a bigger market. If you wait someone
will do it first. That may be a competitor, a print shop, a
library, even a coffee shop. What being a follower mean to your
business and community relationships.
5. I said 5 and 508 is my last suggestion. This is not
an individual store option today as much as a co-operative one
which could provide high visibility, take away a painful
exercise for publishers, provide a real service and relationship
link to the thousands of disability officers and the solution is
not difficult not expensive.
Unlike climate change, it is not time to defend yourselves
against the threat, but a time to engage with it.
For retailers it clearly can be a glass half full and
offering all new and exciting opportunities to build yourselves
into the future.
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