Friday, February 26, 2010

My Notes from an Interview on Ebooks

I just sent off some responses for an email-based interview as background for an upcoming article on ebooks in a magazine. I thought that I would share them with you in the raw here to open a discussion on ebooks that we can continue on Buzz or via the comments section of this blog. What are your thoughts about how publishers should approach ebooks?

Questions and my responses:

—It seems like the specifications for e-readers vary widely from device to device, and this year’s offerings look just as varied. Are there particular capabilities or specifications that publishers are really looking for from e-readers right now? What would an e-reader “silver bullet” device need to be capable of?

Some publishers are beginning to consider new content and features for ebooks, such as video interviews with authors and "hooks" into Web content such as social media services. In some instances publishers are hoping that such value-add content may allow them to command higher prices for ebooks than the prices that have dominated for ebooks from major publishers since the introduction of ebooks on Amazon's Kindle platform. To this end a platform such as Apple's new iPad is attractive to publishers, as it offers a device that can work well as a general computer and as a display mechanism for rights-protected content. But there will be relatively few titles that will be targeted for such enriched content. So what is the "magic bullet" platform for ebooks? The one that's been out there for more than fifteen years, I would argue: the Web. Ebooks will do best when they can be linked into Web content effectively, not necessarily on the device on which we like reading book content the best. With dozens of new kinds of mobile devices being introduced every year, now, it would be counterproductive for book publishers to try to target only a handful of devices for commercial success. It's best for ebook publishers to enable their content to "play well" on as many devices as possible and to ensure that what a reader does on one device can lead to a valuable experience for the same person on other devices that they use. For example, if I have just finished reading a chapter in a book about the state of business and economics in China, that's a great opportunity for book publishers to be able to apply metadata and keywords relevant to that chapter to other services that I as a reader may use. Some of those may be integrated into the ebook reader directly, but I'd probably appreciate them in a private email or messaging service delivered on a platform where I can consume or purchase other forms of content easily. Publishers should think of the ebook itself as just one item in a systematic approach to engaging audiences interested in specific authors and topics. Some of that approach may be delivered best via a publisher or a bookseller on their own portal, but their metadata may lead to rich experiences on partner platforms as well, triggered by contextual advertising network technologies or other technologies.

—On a related topic, are there specific capabilities that consumers are now looking for?

One of the key items that consumers ask for consistently is the ability to call ebook content their own and to be able to manipulate it the way that they would other forms of electronic content. Being able to cut, paste, share and annotate book content is key to enhancing its value in the eyes of book-reading audiences. These types of features, though, are the ones that publishers are least likely to offer to consumers without some form of rights management technology controls. While publishers have a right to defend their copyrights effectively, they have to consider carefully how content reuse and sharing can enhance the value of their products. O'Reily Media, for example, is pushing to have DRM controls removed from ebook content that they distribute, so that it can be used more effectively in collaborative environments. Eliminating DRM can also accelerate the ability of ebook content to be used by its purchaser on any number of technology platforms. This will accelerate also the likelihood that someone will actually read a book that they've purchased. In doing so, that reader is more likely to follow up with more purchases of similar content or value-add content associated with that title.

When you think of it, a paper edition of a book has nothing more than the copyright symbol to protect the legal rights associated with its content. Why would publishers want to frustrate consumers who have already demonstrated via music download purchases that they need the ability to transport content that they've purchased to new types of devices easily without the frustration of dealing with incompatible DRM systems? Ebook services need to enforce copyright but also enable the value of ebooks in as many contexts as possible. DRM services as designed today make that relatively hard to do. What is really needed for ebooks is a built-in ecommerce service that enables both the purchase of ebooks on a person-to-person distribution basis and that enables other types of ecommerce for related content and experiences. For example, if someone forwarded me a link to an ebook for possible purchasing or sharing, I should be able to be presented information about attending upcoming book talks by the author near me automatically on an opt-in basis or related titles or videos that are available. In other words, we can use the offering of content sharing as a revenue-generating experience from many angles.

—Are there any particular e-reader devices coming out in the near future (or that came out recently) that really stick out to you as being potentially influential devices?

Apple's iPad is bound to be an influential ebook reading device, if but because it introduces color formatting to ebooks in a user-friendly design, but I think that the most influential ebook technology will not be any one specific device but the ePub ebook publishing standard. This standard is gaining wide acceptance as a common format for ebooks, although rights management services may differ from publisher to publisher for ebooks published using that standard. Cross-platform standards will help to make ebooks accessible on more devices more rapidly than any one "magic bullet" device can afford publishers. The Nook ebook reader released by Barnes and Noble features ebook content published in ePub format and has been a very popular unit so far. Other devices such as Plastic Logic's Que device are promising advanced touch-screen devices for displaying ebooks and other types of electronic documents, but they are very expensive compared to consumer devices. Probably the most important devices are mobile phones, which are the most plentiful media-displaying devices in the world today. If you can reach book-reading audiences on mobile phones, then you don't have a very effective ebook strategy.

—Are there any specific markets where ebooks have the potential to make a big impact, yet still remain more or less unexplored?

Ebooks open up the possibility of both new ecommerce models and the re-introduction of older commmercial models for books in new ways. For example, in the 19th century it was fairly common for books to appear bit by bit in periodicals. I think that it's worth considering how popular authors may prove to be a source of subscription revenues for book publishers via Web portals for periodicals sponsoring such bit-by-bit access to a book, or even via email or direct downloads onto mobile devices. Ebooks are also just beginning to touch on some of the potential for creating new opportunities in packaging content for educational markets.
—Is Apple’s agency model of ebook selling the new standard? Does Amazon have any hope of holding onto its retail/wholesale model, and maintaining control of the pricing of ebooks on its website?

I think that we will continue to see a mix of retail/wholesale and agency models for ebook distribution, but publishers have a lot to gain from the agency model if they choose their partners wisely. Amazon in a sense has an agency model built in to its model in the sense that it enables people to embed "kiosks" for selling books in Web pages. Whether its an agency model or a retail/wholesale model, the important thing for publishers to do is to make people aware of books in as many contexts as possible where people are likely to have interest in purchasing them. Helping Web site developers and individuals with their own social media presences to "dress up" Web pages with information about and from ebooks will get them in front of people at the times at which buyers are going to be most likely to have their attention.
—Related question: If the agency model were to become the new standard, what effect would this have on ebook pricing in general? Are ebooks going to become more expensive all around? And would higher prices benefit the industry in the long run, or potentially harm it?

Publishers are looking for better margins and retail prices from ebooks in general. While the agency model has been held up as a tool to enable better prices and margins, it's not clear that enabling publishers to set their own prices via the agency model is going to support prices and margins in the long run that much better than the retail/wholesale model. The agency model also opens the door to price competition between publishers, as they seek the right balance between unit sales and margins. So it's possible that what we'll see in the agency model is a handful of books at higher price points and a majority of books at lower price points. The main problem that book publishers face is not competition from Amazon or ever other book publishers but rather content that's been born on the Web - including ebooks that have been developed through online services. By managing information about what Web-native ebook content is most popular, this new breed of publisher may develop to become "good enough" alternatives to major publishers that many ebook consumers will be glad to consume their ebooks at price points that will be much lower - and, often enough, better integrated into online content. I think that higher prices via the agency model are fine for established book publishers in the short term, but if they don't use those improved margins to invest heavily in digital-first marketing strategies then they are going to squander the real opportunities to develop profitable ebook publishing strategies for the long run.
—It seems like the multiple competing mp3 marketplaces quickly collapsed into just two or three players as the digital music market matured. Are we going to see the same thing happen with ebooks?

Just as the commonly accepted MP3 file format flattened out the music player marketplace, so will the ePub format make it harder for devices to develop proprietary appeal based on file formats alone. In the long run that's a good thing for publishers, since it means that ebooks will be useful on billions of devices rather than millions. Book publishers need to be ready to accept that this is beneficial and to prepare revenue models that are designed to maximize the benefits of rapid and broad dissemination of ebooks, taking into the account the potential power of viral marketing. What could be better than to have someone chatting about a book that they loved at a social gathering and to enable people who hear their praise to experience that book in part immediately via a tap of two mobile phones, as used in the Bump mobile application? Book publishers need to trigger sales based on social interactions far more aggressively - search alone cannot help them to build online revenues effectively.

—E-Ink, color LCD, and other display techs like Pixel Qi: what are the pros and cons of the various display technologies? What seems like the most likely way forward for the e-reader industry?*

While eInk has definite advantages under specific circumstances, such as bright sunlight and limited battery recharging opportunities, the increasing life of mobile device batteries and increasing efficiencies of backlit touch mobile displays are making eInk increasingly a niche device play. The real problem with eInk and similar technologies is not the technologies themselves but the demographics of the audiences that they serve. eInk-like technologies are oriented towards people used to print materials. The younger generation of readers has grown up rarely using paper for reading in general, so being able to duplicate a paper-based reading experience, be it in book, magazine or newspaper format, is far less important to them. Paper-analogous technologies tend to be more important to publishing executives stocked with employees who have skillsets most readily adapted to print-formatted materials. Touch-sensitive displays are particularly appealing to publishing executives for similar reasons, but these technologies will benefit Web-native materials as much as they will traditional media materials, so there's no strong reason to believe that they can develop unique market advantages through touch interfaces either.

—How do you feel about hybrid devices like the enTourage eDGe and iPad, which position themselves as being somewhere between an e-reader and a netbook? Are one-purpose e-readers like the Kindle becoming a thing of the past, or is there still potential there?

I think that there's still definitely a place for limited-function ebook readers. Books are a very personal experience for a reader. Book readers tend to use books as an opportunity to spend one-on-one "quality time" with a particular author, tuning out other stimuli to concentrate on what is usually a very carefully prepared manuscript. With that said, though, people find themselves shifting from a book-reading frame of mind to their online frame of mind fairly rapidly and fluidly. For these situations, having an ebook on a multi-function platform can be very beneficial to publishers, as it may allow them to take those moments of transition to put their book content into more contexts at a time when a reader is most motivated to do so. Publishers have been drawn to simple ebook readers initially because they feel that this replicates their existing relationship with readers more effectively - and they do, by and large. But in limiting their vision of their relationship with readers to their existing models, in part to prevent duplication or sharing of book content, they have shut out books from the billions of people who interact with content and with one another every day on the Web. Standalone ebook readers will continue to have appeal, but these devices must enable readers to interact with the Web through other Web-enabled devices more effectively. For example, though I may not want to do social media sharing of a passage from an e-book via a Kindle or a Nook ebook reader directly, I should be able to build a queue of excerpted passages that I can then manipulate via a mobile phone application to share with others.

ContentBuzz: Sirius XM Posts Profit, Its First Since Merger

Yes, recovered from near bankruptcy, but still dealing with a bankrupt business model. Subscription satellite radio is dead in the face of subscription Web radio services such as Pandora and Last.fm. You have to literally go 22,000 miles into outer space to try to find technology rare enough to think if a "walled garden" that can compete with mobile Web delivery. That's not to say that there aren't good uses for satellite broadcast services. I'd suggest that Sirius - or whoever gets access to its frequencies - consider real-time broadcast services that complement the Web content that more and more people can get in their mobile devices, perhaps providing data, video and music downloads that would otherwise be too data-intensive for mobile networks. Or, who's to say, perhaps, print-on-demand subscription newspapers.

Comment on Buzz

Thursday, February 25, 2010

About ContentBuzz: Integrating Google Buzz into ContentBlogger

As those who follow me on Twitter may know, most of my posts of news headlines these days come by way of Google's new Buzz social media service. When you click on my links in Twitter or, on ContentBlogger, via the headlines window, you'll visit my Buzz posts that have my more detailed headline commentary. Many of these commentaries aren't as detailed as my ContentBlogger posts, but they are timely insights, nevertheless. Moreover, you'll be able to take advantage of the Buzz commenting service to share your thoughts with others on both the news items and my commentary. You're not obliged to have a Google Accounts login to view these comments, so I consider this a more open alternative to Facebook commentary, and one that is free of some of the commercial and personal "noise" that one finds on the Facebook service.

From time to time on ContentBlogger you may now see items prefixed with the term "ContentBuzz." These will be items that I have cherry-picked from my Buzz stream for your consideration. I'll include a link to the original news item that prompted the post along with a link to the item in Buzz, where you may contribute your own comments - or, if you prefer, you can continue to leave comments on ContentBlogger. Hopefully I can get this merged in more effectively in the weeks ahead - any and all ideas appreciated - but for now, be aware that there's a lot more commentary coming your way.

Alternatively, to subscribe to a feed of links to my Buzz posts with headlines, click here.

ContentBuzz: iPad purchase plans sluggish, AdMob survey finds

Well, this may be an example of a poorly targeted survey returning data that creates its own reality. So one in six iPhone users intend to purchase an iPad. Well, is that so bad? It means that some people already heavily invested in mobile touch devices may actually go out and purchase a second one. That's not necessarily bad news. What the survey really doesn't tell us is how much the iPad will motivate purchasers who have yet to obtain an advanced mobile phone. In theory, that's supposed to be one of the key iPad appeal points, right? You know, get mom and dad who have never used a PC to cozy up to this magazine-sized gizmo? What the survey tells me is that leading technology adopters are having a hard time understanding why they'd buy an iPad - which may affect the breadth of the buzz that would push people who follow the leaders to consider a purchase. But that may not say anything about people who don't listen to those leaders. We'll see, but my guess is that by the time the iPad launches the buzz on competitive devices will be ramping up.

Monday, February 8, 2010

The Rebirth of Print: Time for the New Aggregation Plays to Take Off

Somewhere in the world today a printing press operation is preparing to go dark. Mind you, it's not a universal phenomenon; in markets such as India, where a burgeoning middle class is hungry for news and not yet equipped with an abundance of electronic media sources, print media is actually growing. Scholarly publishers are still doing well their premium journals and custom print for B2B and consumer markets is thriving. But in many developed media markets print operations are struggling to stay alive, with 2010 expected to be a year in which newsstands begin to display significantly fewer titles. Barnes and Noble, with its Nook ebook reader, offers free wireless in their stores as a bundled part of the service, trying to encourage both browsers and coffee-drinkers to make more use of their "big box" stores real estate. It's a Web-eat-paper world, and the publishing industry is wearing newsprint shorts.

Yet the broader picture of print is that print publishing technology has never been more sophisticated, cost-effective and capable. Many of the same technologies that enable the Web also enable printing presses to deliver mass-customized printing runs, allowing wholesale book distributors such as Ingram to deliver profitable print runs for titles with as few as two ordered units. Mass print customization also allows ever more effective tailored marketing materials, allowing highly customized color post cards, brochures and other high-value communications tools at very competitive prices. In short, print rocks, if you do the right things with it.

The wrong thing to do with print is to expect to do the same thing again and again and expect different results. That is, as many will tell you, the definition of insanity. Unfortunately, this is the insanity that grips much of the B2B and consumer publishing industry. I paid a short visit to the recent Professional Scholarly Publishing 2010 conference in Washington, DC, though far less time than the event deserved. I was encouraged by the American Institute of Physics winning a PROSE award for their work to advance scholarly publishing through its Web-enabled services. Yet at the same time I was confronted by a surprisingly young attendee who had a hard time getting his head around the definition of publishing that I had used in my book Content Nation, which embraces social media as a key form of publishing. He saw this concept as "too broad" a definition of publishing. In spite of many advances in electronic publishing, many people at the heart of the publishing industry still see the traditional business model and functions of publishing as the "real" publishing industry. You can see this attitude in many of the efforts to adopt electronic publishing platforms that enable content to look more like print publications, as if waiting for the Web to give up its "defects" in failing to adapt to their ways of doing business.

Well, certainly the Web is still a relatively young form of publishing technology, in spite of its rapid advances. But it is not the Web that has failed publishing: it is publishing that has failed publishing. It's only as red ink has flowed liberally in the past couple of years that many publishers have made the hard decisions to adjust their staffing levels to the revenues that they can expect in a Web-first world. There are simply far too may substitute information sources available to the average person that can be discovered via search and social media tools to justify the dedicated brand approach to publishing that most publishers use as their fundamental business premise. If "a brand is what a brand does," then most publishing brands just don't do what Web publishing outlets such as Google and Bing do. If that "doing" doesn't align with the classic "dos" of publishing but still satisfies markets, that doesn't mean that it's not publishing.

This brings us back to print, where, in spite of the capabilities of mass print customization, most publishers insist on creating print artifacts on a mass scale that are in essence the same. Yes, you get some zip code-level tailoring of ads, sometimes, and perhaps some regional content, but it still isn't dawning on most publishers that the real opportunities in print are in creating highly customized artifacts on a massive scale. These are still seen by most publishers as "ancillary revenues," much as they saw Web operations as a little bit of gravy on top of the meat of their print revenues. But now that Web revenues have to sustain them more as their meat in many instances, most publishers have failed to position their print operations as highly targeted and highly profitable value-add operations, Instead, they continue to seek out ever-slimmer markets for mass-produced print content, either resigning themselves to smaller audiences or seeking out larger audiences with ever-slimmer slices of least-common-denominator content that offers little long-term brand value either as a product or as a service.

The answer to this problem can be seen in a now-familiar model: Google. Instead of trying to assemble a portal of perfectly curated content for specific audiences to consume over an indefinite period of time, Google decided to focus on search as a tool to curate content tailored to specific people's needs at specific moments. Each search result is a publication, with its own editorial rules, tailored ads and features. It happens to be a publication assembled from any number of sources, selected based on the editorial recommendations of people using content on the Web, via Google's ever-changing PageRank algorithms.

The question is, why haven't publishers awoken to the opportunities to take a Google-like approach to print? Just as the advantages of search technologies are largely wasted on relatively small collections of content, so are the advantages of today's mass-customizable printing technologies wasted on relatively small collections of content collected by a particular publishing house. The Web exists, and will, in all likelihood, never cease to exist as a medium that reduces distribution costs and speeds to near-zero levels.

This means that print as a platform must adapt to Web economics to deliver optimal results. To do this, print media must adopt a Google-like model of source-agnostic content aggregation tuned to the needs of tiny and/or individual audiences. In other words, just as search engines have enabled people to aggregate content from anywhere that meets their needs, so must print media operations if they are to return high value. Some service, somewhere, will enable people to print any collection of content from whatever source in whatever form suits them best in whatever quantity suits them best.

Some might say that copyright concerns stand in the way of such an approach, that this would be the equivalent of enabling anyone to print up content willy-nilly. Not so. What really stands in the way of this happening is an antiquated sense of "this is what publishing does." If publishing in the classic sense is getting value from copyrighted content, then simply tune that classic model more effectively to the available channels. In this instance, that tuning would require a more flexible approach to content licensing. Today, content licensing is still largely a person-to-person effort, requiring business development specialists or marketing managers, legal departments, and days, weeks or months of process time required to enable one publisher to use another publisher's content, be it in print or electronic form. But if today's printing technologies have the ability to assemble content with Google-like agnosticism and speed in a way that's tailored to very specific needs, then it is content licensing, not copyright, that stands in the way of more effective print revenues.

Thinking of both existing licensing technologies from organizations such as Copyright Clearance Center and iCopyright as well as emerging technologies from organizations such as Journalism Online, we are likely on the verge of a new convergence of licensing and printing technologies that can revolutionize what appears in print. This does not mean that print as a whole will surge back as a primary profit center, though. In the long run, the time that it takes to spool out pages of print will never be a match for the Web's ability to spin out tailored text and multimedia content sets instantly and effortlessly. But it does mean that the wide availability of custom printing technologies and the wide availability of people with professional printing skills figuring out what to do next in the aftermath of the current print apocalypse is likely to fuel the Google-like print revolution of mass-customized print content delivery no matter what. The main question is whether it will be Google taking on that challenge on a large scale or someone else.

The other key question, though, is whether publishers are going to balk at the notion of massively automated content licensing for tailored publications. Given history and publishers' attachment to the notion of their brands being what they want them to be rather than what their audiences want them to be, it's likely that many will balk at the idea. In that period of balking, it's likely that widely available substitute sources of printable content will work their way into these opportunities - leaving established publishers as also-rans yet again, though this time in their native medium.

Publishers failed to optimize their operations for Google-like content searching in time to take advantage of the in-the-moment opportunities available to them, in part because they were afraid that it was a technology that was in conflict with their publications' Web sites. The same sort of tensions seem to exist with customized printing and typical print editorial operations - and the same opportunities await publishers that tackle them proactively with aggressive automated content licensing strategies.

High-value purchasing and advertising opportunities await those publishers that begin to take highly customized printing opportunities more aggressively. Just as Web revenues looked like a puny investment early on, so does custom publishing look more like a sideline than a main line of revenue to many publishers. But in a world in which Google has become the center stage of most of the world's content access, it is imperative that publishers look more seriously at how their print publishing models are affected directly by the same potential for agnostic content aggregation - and leverage them as rapidly as possible for high-margin revenues.