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"2020 Vision in a Digital
World"
Presentation to the Gothenburg Book
Fair, Gothenburg, Sweden, September 2010
I wrote The Brave New World report four years ago, in November
2006. Its aim was to identify the opportunities and challenges
for booksellers in this new emerging digital market. It has
since become the essential digital guide for many in the Book
Trade.
I did not write the report and walk away. I undertook the
task of updating it through my Brave New World blog.
When I started the blog there was no Kindle, no iPhone, no
apps; Google were a threat but there was no Book Settlement;
libraries were still full of books with not an ebook in sight
and digital ebook format wars still prevailed. We now find
ourselves with; a colour tablet, a new ecosystem ‘Appleworld’,
Kindle and Kobo platforms, a growing digital market, a new
pricing model, Amazon present in all areas of publishing,
Android and Google Editions, epub, Adobe DRM and much more.
I intend today to review the five common drivers that have
prevailed over the last 4 years and featured heavily in the 1600
articles that I have written my our blog. I will then to look at
the lessons learnt, before I step boldly forward with2020 vision
into the future. Finally I will give booksellers my ten tips as
to what they should be considering doing in today’s Digital
World.
Understanding the past, is the first step to positioning
ourselves for the future.
So what are the 5 common drivers that I believe have shaped
this last 4 years?
The first is the inevitable convergence of technology.
In a highly visual and coloured world, who would have
expected a ‘black and white’ device to break new ground? The
eInk technology offered the ability to read in bright sunshine,
had a long battery life and was the size of a book but lighter.
It could store thousands of titles and enable you to carry your
whole library around with you. The eInk reader was heralded as
the next consumer ‘must have’ and the tool to promote a return
to mass reading.
However, it was dull, chunky and reminded you of those early
and non-portable laptops or the early mobile ‘brick’ phones. I
saw eInk as a transient technology, a black and white TV in a
colour TV world.
Despite its failings, short life expectancy, high ticket
price and the lack of real depth of digital content, eInk reader
still achieved some significant steps. They dramatically reduced
the ebook formats to Adobe eBook , epub and Amazon’s proprietary
Kindle format. Also they achieved wide adoption of a single DRM
service and in doing so opened up inter-operability between
devices. Importantly, the eInk reader gave the market confidence
to move forward with ebooks.
In 2006 we had smartphones that weren’t ‘smart’. Their old
and tired operating systems were built for the previous era.
They constrained the user with badly designed user interfaces
and inability to effectively browse the web.
The impact that Apple’s iPhone had on the market can’t be
underestimated. Overnight the mobile phone was redefined. First
the ‘look and feel’ changed from trying to accommodate keys and
screen, to touch screen. Second the device became multi media
offering video, audio and colour. Third it continued to exploit
the inbuilt camera. Fourth it was wirelessly connected 24x7 to
the internet. Finally it introduced, promoted and generated a
new form of application – the app with its own app store.
The iPhone has had a significant cultural impact and
introduced new technology which has been enthusiastically
accepted by young and old. It is the invention of the first
decade of the 21st century.
The potential rival came from the most unexpected quarter -
the search engine and advertising giant, Google. They also took
an unexpected strategy to provide an open solution to all the
vendors. The Android was capable of multi tasking and also had
an open app store. Android is no longer a bit player and I
predicted will be the dominant mobile operating platform within
the next couple of years.
However the iPad has re-defined the mobile and media User
interface. Forget that it doesn’t have a camera, is not multi
tasking, doesn’t have some simple and widely used connections,
doesn’t support Flash. These can be and will be fixed. It is
about redefining the user interface, applications and
portability. Samsung, Dell, LG and others will follow and will
provide an interesting challenge but the iPad clearly was first
and broke new ground.
So we have now clearly moved into a mobile media world.
Second came the new entrants, the outsiders the technology
giants
Four years ago Google were scanning first and asking
questions later. They were hoovering up all library works and
creating a sizable repository of digital content. Their main
competitor was Microsoft with their Live Book Search book
scanning programme.
We have to remember that the new entrants enter very fast but
leave just as fast and In May 2007 Microsoft declared that they
were pulling out of the race.
Google was now free to put its foot down, to scan on
regardless.
In October 2008 the Google Book Settlement was unveiled. I
have written numerous articles on what I see as this ill
conceived and audacious ‘land grab’ for little money and
exclusive gain of orphan works. Our articles chart the events
from day one when I declared it ‘The Great Book Bank Robbery’ to
today, when we await Judge Chin’s decision on the revised
settlement. The industry took too long time to understand the
implications and had to be informed by many from outside, such
as the US Justice Department, before the tide started to turn
and people started to understand the challenges posed by the
settlement.
Whatever the outcome, it heralded a new era where new
entrants seemingly went after the prizes. Google highlighted to
an industry that was built on the trading of rights that it
didn’t even have a rights registry, nor the collective will to
address one without being funded by others.
Google have now announced they are to sell digital books
through Google Editions. In the US and UK some believe that the
Google Editions will enable booksellers to partisipater, others
that it is a real competitor to Booksellers. Whatever the
outcome it clearly says Google on the tin and is only one
channel to market.
In 2008 Steve Jobs said of the Kindle and reading, "It
doesn't matter how good or bad the product is, the fact is that
people don't read anymore... The whole conception is flawed at
the top because people don't read anymore.”
We have recently witnessed his apparent 360 degree turn with
the iPad.
The truth is that you have to look at what drives a company
to understand what they want out of any market segment. Apple is
about Appleworld, a xenophobic and insular control approach to
moving device and service sales. Books only interest them if
they sell devices.
Sony went head to head with Amazon. They did provide the
initial epub push but some would suggest that they have now lost
their way and have missed the boat.
Adobe’s support of epub was a brilliant move in not only
capturing the high ground but also in tying it to their DRM
service. It also enabled them to lock themselves into many of
the new eInk devices coming on stream.
Amazon now covers all the bases from the author to reader.
They support authors direct, are a publisher, own the audiobooks
market, have the largest physical global bookstore and have a
global brand synonymous with value and service. They themselves
believe that they own some 80% of the ebook market.
Their most significant move has been to drive down the cost
of ebooks. Publishers may believe that the agency model gives
them back control but when we step back, we find that the ebook
price is still a lot lower than originally envisaged by many
publishers and Amazon’s revenues are now protected irrespective
of the price paid. Some may say this is not a wise move by
publishers and one that also presents new potential issues on
tax and restrictive practices in the US and retail price
maintenance in the UK.
Third Came the Digital Content Itself
The majority of digitisation programmes have merely taken the
physical book and poured it unaltered into the ebook. In essence
the editorial and production process continued unchanged and the
finished book was then ‘converted’ to an ebook, merely replacing
the physical jacket with a digital one.
I have written a number of articles on the Japanese digital
Keitai novels and Manga comics. However we have seen little
movement in the West and what experimentation has happened with
multi media and short story publishing programme has been the
exception.
Fourth came the author
The Author has now been given the opportunity to go direct
digitally . Previously print on demand (POD) offered a limited
channel to market but was cost prohibitive and demanded
relatively high unit price.
The higher royalty rate originally offered by publishers on
digital, has slipped along with advances, the midlist and back
list authors continue to be overlooked and these issues are now
driving the author to rethink digital. Publishers such as Random
House believe the ebook is ‘just another book format’. Others
would like to see rights reversals not applied to digital and
POD works be effectively tethered to the publisher for life plus
70 years.
Scribd, Wattpad, Amazon and Lulu.com have now started to
offer authors a digital self-publishing opportunity and channel
to market.
In a weird twist, the new agency model could be the biggest
boost to authors going digital by themselves. US author J.A.
Konrath claims that he can sell more ebooks at lower prices than
a publisher and earn more to boot. Under the 70/30 split things
suddenly get a whole lot better! He thinks the $2.99 could
become the new bargain rate for authors such as himself and one
that which will look very attractive against the ‘safe’
publisher pricing.
We all now have to ask ourselves what is our relationship is
with the author?
The fifth and final driver was Social Networking
Are You socially connected and if not why not?
Today, Facebook is getting more hits than Google search.
Twitter has also exploded onto the scene and Ivy Bean showed
that you are never too old to learn and at the age of 103
started to Twitter. Now 104, she has some 55,000 followers.
Facebook and Twitter have made celebrities out of ordinary
people. Together with the likes of YouTube, they have
reconnected people who where disconnected in the old world, or
fearful of technology.
In many ways Facebook, Twitter and YouTube are the new
Gorillas in the back yard of publishing and pose as much
opportunity, challenge and threat as any in tomorrow’s digital
book market.
What about the Booksellers?
With exception of a few, I feel that Booksellers have not
risen to the challenge, have not engaged in the digital market
and often stand transfixed like rabbits dazzled in the digital
headlights.
I would predict that by 2015 the digital market share could
be some 20% to 25%. Although digital sales will continue to grow
there will be a slow down in terms of revenues but will continue
to grow in terms market share.
I also predict that by 2015 some sectors will be ‘digital’.
So will the bookseller remain transfixed? Last week British
broadcaster Stephen Fry said that he thought there would be that
there will be a "hell of a culling" of traditional bookstores as
a result of the increasing adoption of iPads and ebooks, but he
added that some will survive. The question is who and why?
So what lessons can we learn from our recent history?
If we look back at the late 1990s, the first dot.com era, we
saw Amazon constantly belittled and written off by many inside
and outside the trade. Many Bookstores concluded that the online
offer was too expensive, offered little return and that
consumers still preferred to shop in the High Street. Some
ventured in and spend significant money but were ill advised and
frankly doomed to fail. They didn’t understand online service,
virtual inventory, global branding and everyday low pricing. I
predicted back then that Bol.com and B&N.com would fail to
dominate the market and I got it right, they didn’t.
Some would suggest that Amazon, ABE, eBay and others built
merchant offers that enabled bookstores to participate. Many
rare and antiquarian booksellers prospered through this new
channel. However, many failed to see whose brand was actually
being built and who controlled the commerce. Others thought it
was simply enough to have a white label and their brand was
enough. Having a channel to market is one thing, but having
control of its economics and the customer relationship is often
another.
Compare Amazon today with any book chain or bookstore in any
major market and ask who got it right and who got it wrong.
What have you learnt from Amazon?
Today’s ebook world is no different just a different agenda,
different economics, new entrants and a big opportunity for many
but will the bookstores be left behind or will they learn the
lesson from before and rise to the occasion this time?
Before I look deeper into today’s opportunities lets step boldly
forward with 2020 vision and look 10 years forward. We need to
appreciate that the one certainty about the future is that it
will be different.
Technology will enable us to move into a virtual world, get
instant communication, create new communities, explore and even
see what we could never imagine possible before. But what will
this mean to our access to and interface to information, media
and storytelling and how we sell books?
I offer 5 predictions
First there will be greater choice
Today our views, interests and cultural awareness is
restricted by what we can find and access, how we access it,
what we can do with it and how we use it. Interestingly, we are
shaped more by what we don’t know, than by what we do know.
Media is a classic example of where the technology and
cultural restriction to information and content can narrow our
perspective and thereby who we are.
Someone who grew up in the 50s did not have the access to the
rich variety of music that existed then. Their taste was
dictated by what and who they knew and could hear. Today, we all
have access to just about every conceivable genre, taste and
also every manifestation of any work every produced. This
opportunity has been created by technology. However, the way in
which we discover, access, experience and form opinions on music
is varied and often haphazard. As a result everyone’s taste is
more eclectic and the music industry now has to support a rich
variety of taste. Genre and sub genre are still important but
people expect access to a width and depth of range of music.
So does the biggest aggregator of information and media win
the future by simply ‘slicing and dicing’ it into verticals?
Aggregation is not about content as we knew it yesterday, but
about referential links, contextual information and about
virtual aggregation. Google doesn’t hold or own every piece of
information, just the indexes and links to every piece of
information.
Merely expecting to sell front list titles of physical books
forever maybe the quickest form of suicide I can think of.
Second ownership will be redefined
Do we all have to own our media and have individual copies,
or can we now share and access all media on demand and in true
real time? Why do we need banks of CDs, DVDs, and libraries of
books? Do bookshelves still define who we are, or are they mere
decorative features?
People will still collect media but more as artefacts than
consumable media. All media will be available on demand.
Today public libraries are going digital. You can log on from
anywhere, loan a ebook for free and it simple expires after 14
days. How does a bookseller compete with free on demand?
Third the question of the User Interface
Our interaction with technology is not natural.
I would urge all who have not watched Pranav Mistry on his
views on our technology future, to watch it. It shows what is
possible today in the MIT labs and what will be mainstream
tomorrow. His technology;
1. takes pictures using fingers to form the lens,
2. enables the naked wrist to be used as a watch,
3. the hand to become a keypad,
4. project interactive information over an image,
5. play interactive games on a piece of paper
6. and manipulates data and control other devices, wirelessly in
real time.
Mistry redefines the user interface in ways which are
compelling and that frees us from; the screen, the keypad and
even the touch screen. In doing so, he will enable humans to
interact intuitively with technology in the future.
We often think of huge leaps forward as impossible. When we
see the sci fi programs such as Dr Who where he reads a printed
book by flicking the pages, we think that would be impossible.
However when we watch a video of the technology actually doing
it today in a Japanese labs in the University of Tokyo we have
to wonder just how long before we can do it?
Those who believe that we are going to interface with
technology in the same way as we do today are in for some
surprises. In the very near future intuitive human interfaces
will become mainstream.
Fourth The dots will be connected
We are now entering an era where bandwith and connectivity
become ubiquitous. This will be soon global for all. This
removes the network as a constraint and opens up the potential
to do anything, anywhere, anytime. We will connect and integrate
anything in real time, which changes how we will grow business
systems and applications, how we will store and access data and
how we will consume media.
The greatest challenge facing us is ‘privacy’ and how we will
marry knowing everything against the temptation to exploit it in
ways that go too far and are not in the public interest. We will
have the potential to not only what was bought but what was
read, when and also what wasn’t read. Knowing every click and
every detail about who and when it occurred gives us both
opportunities and many social challenges.
So who owns the information about the consumer and is that
going to be worth more than the transaction in the future?
Fifth There is Copyright
Today we have a Rights business with no registry and we
express rights as we have for many years. The problem is that
technology is fundamentally changing how we interact with
intellectual property (content) and we now face a period of
continual re assessment of copyright and definition of fair use.
US legal professor Larry Lessig explains that the rights
conflict we now face is far more fundamental than the
enforcement of yesterday’s rights. He claims that we now have a
user generated content culture that is being accelerated by new
technology. This culture embraced by the younger generation
encourages them to remix, repurpose content and represent if
differently. He asks whether this fair use, or piracy.
Lessig believes that it is the democratisation of creation.
He finds that the older generation ‘watched’ TV and ‘listened’
to music, the younger generation ‘makes’ or ‘remixes’ TV and
music. As this generation grows older, common sense needs to
prevail and common licensing needs to be adopted.
I expect this next period to be full of trials and
tribulations and that ‘common sense’ will prevail and digital
content will be better licensed and controlled. The impact on
the media industry and digital content will be significant and
may well start to redefine publishing as we know it today. It
will also impact on creator royalties and reward structure.
300 years ago before the profession of “publisher” was
invented! The prosperous 18th century booksellers were all large
copyright owners, to quote from a book about the leading
bookseller of the time, Robert Dodsley “for the real money lay
in ownership of copyrights, not in the retailing… booksellers
were the entrepreneurs who purchased rights from authors, and
binding to others , merchandised and finished the product
through advertisement and trade distribution.” What goes around
comes around.
Long may the author-bookseller relationship flourish and
maybe what goes around comes around
Finally what of Booksellers?
Will Booksellers still matter in the new digital world? Yes
Will Booksellers need to adapt to the digital opportunities? Yes
Will digital books replace physical books? No
What will be the role of the bookseller in the new world?
I will give you 10 tips for booksellers to think about. They
may not all be right for everyone today, some may have already
been started but they should all be considered and revised
regularly.
1. Own the customer relationship
Do you have and actively manage email lists
Do you know your customers interests
Do you know why they buy from you
Do you know what they don’t buy from you
Do you run loyalty schemes
2. Create communities
This isn’t about physical communities its about virtual ones or
social networks
Do you encourage feedback, comments and reviews?
Do you belong to virtual communities and and if so how can you
build relationships with others
Do you have relationships with special interest groups, authors
fan groups?
Do you have a facebook or My Space presence?
3. Sell Books
Break out of the Front list sale or return trap
Give the customer what they want they aren’t just front list
focused
Sell all books and learn form the likes of the best such as the
Strand in New York
Think how you can buy and sell and be what
Do what it says on the tin – be independent
4. Think Mail Order on the Internet
How do you promote books differently?
How can you use digital marketing to sell physical and digital
books?
How do you continue to stimulate your customers?
How do you up sell on the internet?
5. Be Promiscuous
Use cascade sourcing to get the best deal at the right time on
the right book
Link to everyone and use everyone as a supplier
Offer comparison shopping
Use Digital Drop ship logistics it isn’t rocket science
6. Stop competing with your allies
Find others and join forces
Collaborate, collaborate, collaborate
Don’t wait for industry bodies to do it for you it may be too
late and full of compromise. Show them the way its your business
7. Forget POD and adopt DOD (digital on Demand)
8. Price Right
Price keen but not suicidal.
You can’t beat the biggies so stop trying
Show value added not discount reduced
9. Don’t Sell ereaders its not your business
Would you buy an ereader from yourselves - No so why expect
others to do it?
But keep abreast of technology and markets because others will
Can you demo equipment or show You Tube clips of them
Sell digital off the internet, over the phone, in the shop, off
the page
10. Keep abreast of the digital market
Don’t believe everything you are told
Separate the News from the noise
Find trusted sources
There is no one expert or source
Remember these are perilous and unchartered seas and although
I all may be able to teach you how to swim I can’t stop you from
drowning.
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